Why the Bailout Bill Failed

So how could a major bill described by the president and both parties' leaders as critical to the well-being of the nation's -- and the world's -- economy go down to defeat?

There are no easy answers here, as the House's stunning defeat moments ago of the financial bailout legislation is putting us into seemingly uncharted territory. But while the final tally, with 133 Republicans and 95 Democrats voting no, was a surprise -- all morning, Hill sources were predicting narrow passage -- the signs were there that the measure was in trouble:

1) Poor Salesmanship. Did you know that the general consensus is now that this bill will not cost $700 billion? If you didn't, it's because the bill's proponents did a poor marketing job. From the start, the Bush administration did not do enough to emphasize the point that taxpayers would get at least some of the money back, and that gigantic price tag got stuck in the head of the public (and the media).

The administration was also too eager and ambitious with its initial proposal, alienating many lawmakers right from the start by seeming to ask for the moon -- give us everything we want, with no oversight. This White House has long played political hardball, but this was not the time for hardball. This was the time for begging. The administration also let the "bailout" label stick to the package right from the start. By the time President Bush started calling it a "rescue" measure, it was too late.

2) Vulnerables Scared. If you have a difficult reelection race, what was your motivation to vote for this bill? "I voted in favor of a bill that I didn't really like, because I had no choice," doesn't make for a particularly snappy campaign slogan. "I stood up to my party and Wall Street," sounds much better. House Majority Leader Steny Hoyer (D-Md.) and Minority Leader John Boehner (R-Ohio) both made the argument that lawmakers needed to rise to the occasion and not think of their own political futures. But members of Congress ALWAYS think of their political futures. It's much easier to talk of sacrifice for the greater good when you're going to get reelected with 70 percent of the vote, like nearly every leader on both sides of the aisle will.

3) No Center of Gravity. Who's running Washington right now? Bush is the lamest of lame ducks, with a minuscule approval rating and no clout or political protection left to offer. Bush and Vice President Cheney were reportedly making calls to wavering Republicans right to the end; obviously that didn't do the trick. Barack Obama and John McCain both supposedly support the bill, but neither of them has been exactly wholehearted in their backing, and there haven't been any reports of either candidate calling members of their own party to lobby.

House leaders, meanwhile, did support the bill and did whip it. But this wasn't a party-loyalty vote; lawmakers were asked to vote yes, but they weren't threatened. They (probably) weren't bribed. Add all that up, and you had a power vacuum.

4) Ideological Problems. The simplest explanation of all for the loss was that a lot of members just didn't like the bill. Capitol Briefing outlined last week all the reasons why House conservatives balked at the initial proposal, and the basic point still stands: A massive expenditure of taxpayer funds and intervention in the free market, combined with tough new regulations, simply offended too many conservatives' most basic principles. And Republicans, being in the minority, feel no responsibility to govern. They calculated that the bill's failure will be blamed on Bush (so what?) and the majority Democrats.

On the liberal end of the spectrum, most members believe this really does represent a "bailout" of Wall Street and a power grab by the Bush administration, and that the current crisis vindicates their longtime warnings that the financial system was riven by greed and insufficient regulation. For those members, the final package didn't have nearly enough help for struggling homeowners.

5) Partisanship? House Republican leaders gave a press conference right after the vote, and they have strongly suggested that Speaker Nancy Pelosi's (D-Calif.) floor speech toward the end of the debate was at least partly to blame for the loss. "I do believe we would have gotten there had the Speaker not made this partisan speech on the floor of the house," Boehner said.

It's too early to know whether Pelosi's speech, which laid much of the blame for the whole financial crisis at the foot of the Bush administration, really made much of a difference. But if several House Republicans actually did switch their votes on a momentous piece of legislation just because they were irritated by a speech, what does that say about them? As Rep. Barney Frank (D-Mass.) mockingly characterized the GOP's argument: "Somebody hurt my feelings, so I'm going to punish the country."

It's possible despite weeks of warnings, and a stock market that is cratering as we speak, that a lot of members still aren't taking any of this seriously enough. And that, ultimately, may be the real reason for today's vote.