The Decision to Go Over a Cliff

Congress is facing a Butch-and-Sundance moment tomorrow in the debate over hurtling into the unknown as relentless mercenary forces close in.

The Senate has thrown them some goodies to slow down the stampede but essentially left the $700 billion cost unchanged--in fact, adding $150 billion in reduced taxes to the ransom.

In the House showdown, it will still be an odd coalition of liberals and conservatives controlling the swing votes. “The bailout legislation that the Senate is sending back to the House," says Texas Republican Joe Barton, "is a fraternal twin to the one I voted against on Monday."

Virginia Democrat Bobby Scott insists there are "a lot of things we can do at virtually no cost to the taxpayer" rather than "a $700 billion purchase of worthless assets," citing mark-to-market accounting to expand lending capacity, net worth certificates to give banks confidence in lending money to other banks and a counterpart of the Home Ownership Loan Corporation of the Great Depression, "which, when the dust settled, we protected all the mortgages, prevented foreclosures, and ended up making a profit."

If Congress were not in panic mode, members could consider still other approaches such as Paul Krugman's plan "centered on purchases of preferred stock and takeovers of failing firms--basically, a plan clearly focused on recapitalizing the financial sector, with nationalization where necessary."

But with the hot breath of voters only a month away, House members will be deciding less on the merits of the rescue bill than calculation of the odds of their own chances at the polls.

On further thought, for taxpayers this may not be like Butch and Sundance, who somehow managed to survive their free fall, but more like Thelma and Louise.