Botched bailout helps challengers

Nothing promotes harmony more than a crisis, and last week House Speaker Nancy Pelosi and Minority Leader John Boehner could not have been closer. The two, along with the rest of their respective leadership teams, pledged a bipartisan effort to solve the rapidly escalating disaster on Wall Street, and for at least a little while, it looked like that bipartisanship was working.

Both sides saw the potential for a political explosion on the horizon, and yet pressure from the administration and the threat of a further economic disaster has prompted the vast majority of Congress that something, at least, must be done.

When Congress faces an issue on which it must act, both parties face what amounts to a prisoner's dilemma. Inevitably, part of their base and a number of independent voters will be turned off by whatever compromise is reached. On the other hand, neither party wants to be tagged with having done nothing in the face of a crisis. In the name of political expediency, both parties work together to fashion a bill, necessarily mitigating what might otherwise be an effective political tool.

That's what happened with the economic stability bill. But thanks to an overwhelming response from constituents -- in some offices, phone calls were running as high as 200-to-one against the package -- a significant number of both Republicans and Democrats voted no, robbing the bill of success in a manner as bipartisan as that with which Pelosi and Boehner had hoped to achieve passage.

Now, the once-happy working relationship is in tatters after the compromise bailout bill backed by both sets of leaders, both presidential nominees and the White House went down in spectacularly unexpected flames. As leaders in both parties head back to the bargaining table to deal with the fallout before stock and commodities markets take another dive, political strategists are taking out the long knives to prepare for partisan warfare.

With five weeks to go before Election Day, Democrats and Republicans have turned on each other, and each is trying to cast the other as the decided loser. With an issue as explosive as what Americans are coming to see as a pending crisis on par with the Great Depression, whichever side is successful in framing the debate could find a clear advantage in November.

Democrats have cast blame on both their Republican counterparts and on the White House. The party made it clear they expected at least eighty Republican votes to give the bill a bipartisan flavor, while Pelosi continued to assert the bill was necessary to begin with because of what she termed years of failed Republican economic policy.

It was that last statement that moved some Republicans out of the yes column, Republican Chief Deputy Whip Eric Cantor said at a news conference after the bill failed. Cantor said a dozen Republicans -- enough to have passed the bill -- were insulted by Pelosi's comments and instead voted no. Since the failed vote, the GOP has tried to cast Democrats as having brought partisanship into a bipartisan bill.

If Democrats are able to convince voters that Republicans are to blame for not buying into the proposal, and that it was President Bush who made the mess in the first place, the party could flip a number of Republican seats in Congress. In recent weeks, Democrats have already started pointing to a number of Republicans who have advocated for privatization of Social Security accounts. When the stock market is shaky, those who would be otherwise inclined to invest their retirement savings might instead see the argument for being more cautious.

But the Republican strategy could be simpler. With Congress' approval rating lower than that of scurvy and the bubonic plague, the GOP need only remind voters which party controls the gavel in both houses. That's the party's strategic advantage: While a 51-49 majority in the Senate and a 30-seat majority in the House do hand gavel control to Democrats, neither are working majorities by any stretch of the imagination. But voters can understand the concept that Democrats are in charge, and they may be less than clear on the concept that, especially in the Senate, a two-vote majority means very little.

If neither party is able to achieve anything of a clear advantage on an economic stabilization package, Democrats may win by default. Economic issues generally work in Democrats' favor, and Wall Street woes and the attendant bailout are no exception. A Washington Post-ABC News poll conducted Monday night among 424 registered voters showed 44 percent said Republicans were responsible for rejecting the bailout, while 21 percent fingered Democrats as the culprits.

And the issue isn't going away any time soon. While a narrow plurality said they opposed the ban as it was written, fully 88 percent said they were concerned the rejection of the plan would lead to a more severe economic decline in the U.S. More than half of voters -- 52 percent -- say the economy is in crisis, while 43 percent say the current financial situation is a serious problem.

Privately, both parties say the White House and, specifically, Treasury Secretary Hank Paulson are to blame. In the end, that may be the smartest political strategy for both parties. The Post-ABC poll showed just 5 percent of respondents blame Democrats and the same number blame Republicans for the current economic crisis, while 25 percent -- a plurality -- lay the blame at President Bush's feet.

Perhaps the most likely outcome, though, is that the failure to reach a compromise -- or the achievement of a compromise that leaves everyone unhappy -- will further depress Congress' approval ratings. Already, that is having a measurable impact on incumbent members in their own districts (Usually, respondents will judge their own member much more favorably than Congress as a whole; this year, even that number is coming down, according to many polls).

That means, come November, that more challengers from both parties will get a leg up. While neither Democrats nor Republicans are likely to change the entire electoral landscape based on the bailout, the failure to come to a popular agreement could mean massive turnover among members of both parties.

Reid Wilson, national columnist for Politicker.com, is also an associate editor of RealClearPolitics.com and covers Senate, House and governors' races at PoliticsNation.com. Contact him at reid@realclearpolitics.com.