The Note: The Wreckage

Sept. 30, 2008— -- Can you blame these guys for wanting to get out of that building?

As we watch the stock market try to whip votes in Congress in a way not even a president, two presidential candidates, and the united bipartisan, bicameral leadership could not, everyone looks bad, but some people look more bad than others.

That second list would include, say, those who have lagged when the talk has turn to the economy; those whose party's votes largely sank the bill; those who staked their campaigns to getting a workable solution through Congress; and those who celebrated the measure's passage only slightly prematurely.

Sometimes, gambles fail: "Republican John McCain has maneuvered himself into a political dead end and has five weeks to find his way out," the AP's Steven Hurst writes. "All in all, McCain might have been better served by staying out of the mess and above the fray."

Sen. Barack Obama hardly emerges as a profile in courage; aides couldn't point to a single phone call he made to an on-the-fence lawmaker, and there's the little matter of his own advance text applauding the deal that never was.

(Obama is first out of the box, though, with a new idea Tuesday -- expanding FDIC insurance to help small businesses. And President Bush -- never looking less relevant than he does at this moment -- seeks to calm the markets with 8:45 am ET remarks at the White House.)

(Plus -- the RNC fires back with a quick-out-of-the-box "independent expenditure" ad that probably doesn't make compromise any easier: "Meltdown: Wall Street squanders our money, and Washington is forced to bail them out with -- you guessed it -- our money. Under Barack Obama's plan, the government would spend a trillion dollars more, even after the bailout." A Republican official tells ABC the ad is running in Wisconsin, Michigan, Pennsylvania, Ohio, Virginia, and -- here's a first for the cycle -- Indiana.)

Still, McCain had and still has more on the line -- and would be in the same situation if his only goal was shifting the debate away from the economy, rather than salvaging his political reputation at the same time.

"As a study in his prospective leadership, the role of Mr. McCain, the Republican presidential nominee, has done him no political good," Jackie Calmes writes in The New York Times. "He implicitly took credit for the compromise bailout that Congressional leaders had negotiated over the weekend, even as it was going down to defeat."

"Mr. Obama, campaigning in Colorado, also was taken by surprise," Calmes continues. "He quickly revised his speech, which announced the bipartisan agreement, to instead call for Congress to 'step up to the plate and get this done.' While Mr. Obama had tepidly endorsed the plan and kept in daily touch with Mr. Paulson and Congressional leaders, aides said he did not twist Democrats' arms to support it."

Cue the finger-pointing: "Barack Obama and John McCain seem to agree on two things about the economic crisis. One let's not blame each other," ABC's John Berman reported on "Good Morning America" Tuesday. "And two, let's blame each other."

Obama adviser Robert Gibbs says Obama will step up his pressure on rank-and-file lawmakers: "We're going to work on that more and more today," he said on "Good Morning Ameirca."

Countered McCain adviser Nicolle Wallace: "The bill failed yesterday. Maybe they don't have Internet connections or phones on their big fancy plane." (Where's that storyline been, anyway?)

The failed vote was a failure of leadership, a historic misreading of the country's mood -- and it came after a clanker of a move by a presidential candidate who is still looking for a way to make economic issues his own.

A bad bet: "McCain invested more political capital than anyone else in a deal that went bad," CQ's Jonathan Allen writes. "After the bailout bill fell apart, McCain was left with little room to argue he had helped the process. So, he fired a few partisan shots."

Team McCain, in the aftermath: "This bill failed because Barack Obama and the Democrats put politics ahead of country," said McCain adviser Douglas Holtz-Eakin, per ABC's John Berman and Ron Claiborne.

But didn't the bill also fail because Republicans voted by a 2-1 margin against their president, their presidential candidate, and their leadership? And here's just guessing that a Nancy Pelosi speech had slightly less to do with the vote's outcome than the fact that 435 House members are on the ballot five weeks from today.

(How many years does McCain need to be in Congress before he learns how the place works -- and that you better accomplish your mission before declaring that you did so?)

"Sen. John McCain (R-Ariz.) and his top aides took credit for building a winning bailout coalition -- hours before the vote failed and stocks tanked," Politico's Mike Allen writes. "The rush to claim he had engineered a victory now looks like a strategic blunder that will prolong the McCain's campaign's difficulty in finding a winning message on the economy."

"About an hour before the Wall Street bailout package collapsed yesterday in the U.S. House, Sen. John McCain trumpeted his role in building a coalition to fight for the economic rescue plan," Joe Hallett writes for the Columbus Dispatch.

"So if McCain wanted credit for passage, should he share some of the blame for its defeat?" Marc Ambinder blogs for The Atlantic. "Two thirds of half Republicans voted for its defeat . . . after a weekend of telephone call diplomacy from McCain."

"The house always wins, gamblers are warned," per the AP's Chuck Babington. "By his own actions last week, McCain tied himself far more tightly to the failed bill than did his Democratic opponent, Barack Obama."

"The vote is a blow to John McCain, who had so dramatically 'suspended' his campaign to return to DC and broker a deal," National Review's Rich Lowry writes. "His campaign had explained his role as bringing to the table and coaxing along House Republicans, whose revolt now makes him look ineffectual."

From here, per ABC's George Stephanopoulos, congressional leaders are considering four options for when Congress reconvenes after Rosh Hashanah: Hope the markets change minds and try again in the House; let the Senate vote first to build momentum for the package; make some changes that are popular on the right, like extending FDIC insurance and suspending the mark-to-market rule; or tacking left with the bill to add Democratic votes.

Said Stephanopoulos: "Neither presidential candidate has given any indication that they are going to suspend their campaign and run back to Washington, DC to deal with this. However it's likely well see both Obama and McCain in Washington in person when that vote finally comes."

Whose fault is it? The new ABC News/Washington Post poll has the blame falling on congressional Republicans instead of Democrats, by a 44-21 split. And 25 percent of respondents singled out President Bush as being behind the crisis -- compared to 8 percent who say it's Congress' fault.

Obama on Tuesday endorses the idea of expanded deposit insurance "for families and small businesses across America who have invested their money in our banks."

"While [the current $100,000] guarantee is more than adequate for most families, it is insufficient for many small businesses that maintain bank accounts to meet their payroll, buy their supplies, and invest in expanding and creating jobs," Obama said in a statement released Tuesday morning, per ABC's John Berman. "That is why today, I am proposing that we also raise the FDIC limit to $250,000 as part of the economic rescue package -- a step that would boost small businesses, make our banking system more secure, and help restore public confidence in our financial system."

A path forward? "[House Minority Whip Roy] Blunt said he told Democrats he thought he could flip five votes, if Democrats could do the same," per The New York Times' Carl Hulse and David M. Herszenhorn.

Who wants to work against this backdrop? "The changed landscape is marked by widespread mistrust of all branches of government; a powerless president and a paralyzed Congress; and above all a sinking realization that, five weeks before Election Day, the American economy is likely to get significantly worse before it can hope to get better," per ABC News. "The immediate fallout respects no party lines: The defeat reflects poorly on Sen. John McCain -- who made a dramatic return to Washington last week in the hopes of salvaging a deal that ultimately collapsed -- as well as the Democratic-controlled Congress, which looks powerless in the face of crisis."

"Even as McCain was telling reporters in Iowa that 'now is not the time to fix the blame, it's time to fix the problem,' his campaign was issuing statements criticizing 'partisan attacks' by Democrats 'to gain political advantage during a national economic crisis,' " Todd Spangler writes in the Detroit Free Press.

"For McCain, playing the blame game is a gamble. It could deflect attention from his own unsuccessful effort since last Thursday to rally House Republicans behind the bailout," McClatchy's Margaret Talev and William Douglas report. "It could backfire, however, if voters don't think his criticism of Obama is credible. It also could encourage Obama and his surrogates to paint McCain as temperamental and impulsive, a tactic they're weighing."

Writes former Clinton strategist Mark Penn: "The race is no longer about change, experience, Iraq, tax cuts or universal health care. The job posting has been fundamentally altered. . . . Right now the former Harvard Law Review editor, the candidate who is ready to reach out to everyone across the globe and who has a head for sorting out complexity, is the kind of presidential candidate voters are seeking to solve this crisis. It seems like a great fit for Obama."

Don't lose sight of what's being projected here: "Last week Senator McCain looked goofy by coming off the campaign trail and interposing himself into the legislative process over the bailout. Today he looks like a loser -- his credibility and prestige diminished by the bill's failure," Howard Wolfson blogs for The New Republic.

It's an eight-point spread in Gallup's daily tracking: 50-42.

Do they herd cats out in Sedona? "McCain's political situation is complicated by disarray in the Republican Party," Michael Shear and Dan Balz write in The Washington Post. "The split between Senate Republicans and President Bush, both of whom supported the plan, and House Republicans, who largely opposed it, make McCain's effort at trying to show leadership over his party all the more difficult."

Explaining the "nos": "They did the momentarily popular thing, and if the country slides into a deep recession, they will have the time and leisure to watch public opinion shift against them," David Brooks writes in his New York Times column. "The 228 House members who voted no have exacerbated the global psychological free fall, and now we have a crisis of political authority on top of the crisis of financial authority."

Rep. Marcy Kaptur (D-OH) and colleague Marilyn Musgrave defended no-voters to Chris Cuomo on Good Morning America Tuesday. "We need to have a good bill, not a fast bill. We need to be prudent in what we do," Kaptur said. "We have to address the real estate issue and get that mortgage market working again. This bill would not do that, so I think so we have to look for something that will really make the markets function in the way that they should, not reward bad behavior and give all these bills to the American taxpayer, who didn't cause this problem."

"The nation's credit crisis exposed Monday a much deeper and more fundamental problem -- a political credibility crisis that now threatens to harm our nation further, should the markets freeze up and more companies begin to fail, as many experts predict," Time's Michael Scherer writes.

In the post-post-game, a lowering of the heat: Roy Blunt says it wasn't all Pelosi's fault. "A couple of things happened that we didn't quite get there but, well, you know . . . [when] things are hard to do people are always looking for that last thing that makes them mad, that last thing that says, 'Well, I was gonna be there and that happened,' " Blunt, R-Mo., tells ABC's Z. Byron Wolf and Jake Tapper.

How involved does either candidate want to be? "Both face difficult political choices, as they try to balance appeals to the widespread anger over the 'bailout' -- and the fear of letting markets continue to sink if it fails," Amy Chozick and Elizabeth Holmes write in The Wall Street Journal. "Sen. McCain arguably has more to lose in this crisis, after inserting himself into the negotiations late last week with a dramatic move to suspend his campaign."

All politics . . . ""The bill was a priority for President George W. Bush, yet 15 of 19 Republicans from his native Texas voted against it," Bloomberg's Nicholas Johnston and Dawn Kopecki reports. "Republican presidential candidate John McCain left the campaign trail to help the measure, which didn't get a single vote from his state of Arizona. Almost half the usually loyal California Democratic delegation rebuffed House Speaker Nancy Pelosi."

The biggest single predictor of how a House member voted: How tight his or her reelection race is. "Among 38 incumbent congressmen in races rated as 'toss-up' or 'lean' by Swing State Project, just 8 voted for the bailout as opposed to 30 against: a batting average of .211," Nate Silver blogs at FiveThirtyEight.com.

Per ABC's Karen Travers, of the 31 current House Members on ABC's list of competitive races, 24 voted against the bill -- including 11 of the 15 Democrats, and 13 of the 16 Republicans.

We hope Gov. Sarah Palin wasn't hoping for debate prep to be quiet.

The New York Times' Adam Nagourney crystallizes the challenges in her big week: "she heads into a critical debate facing challenges from conservatives about her credentials, signs that her popularity is slipping and evidence that Republicans are worried about how much help she will be for Mr. McCain in November."

Said former Bush speechwriter David Frum: "I think she has pretty thoroughly -- and probably irretrievably -- proven that she is not up to the job of being president of the United States."

Added Jim Greer, the GOP chairman in Florida: "I think the Katie Couric interview shows that she needs to be briefed more on certain aspects."

Who's the drag now? "Since joining his ticket, the overnight political celebrity has seen the shine come off her poll standings and doubts surface among some conservatives once excited about her candidacy," the AP's Alan Fram writes. "The Alaska governor still draws huge crowds and energizes McCain's drive for the White House. Yet a whirlwind month after he made her his running mate, Palin is starting to seem very, very vulnerable."

The latest prescription -- if you ask Bill Kristol or Mitt Romney or Rick Wilson or Frank Gaffney: Let Palin be Palin.

Point taken: "Sarah Palin will take a more forward-leaning approach and do additional interviews in the weeks ahead, a top aide said today," per Politico's Jonathan Martin.

And yet -- get the siren ready for this one: "Of concern to McCain's campaign, however, is a remaining and still-undisclosed clip from Palin's interview with Couric last week that has the political world buzzing," Martin reports.

"The Palin aide, after first noting how 'infuriating' it was for CBS to purportedly leak word about the gaffe, revealed that it came in response to a question about Supreme Court decisions," he writes. "After noting Roe vs. Wade, Palin was apparently unable to discuss any major court cases."

Where does this fall on the spin scale? "The fact is that she has done incredible job. And I'm so proud of the work that she's doing," he said of his running mate, in the joint Katie Couric interview.

She does seem eager for the debate against Sen. Joe Biden: "After a week that provided plenty of fodder for Saturday Night Live material, the Republican nominee for vice president was a crowd pleaser today and seemed eager to talk about the upcoming debate," Jimmy Orr writes in the Christian Science Monitor.

Could Tina Fey be helping? "Does the impression hurt Real Palin, by cementing the idea that she's unprepared for the job? Or does it help her, by helping to set expectations for the debate so low she can hardly help but clear them?" Time's James Poniewozik writes.

Ready to rumble: "I've been hearing about his speeches since I was in the second grade," Palin said of her rival. (For the record, she was busy winning beauty contests when McCain was a freshman congressman.)

Nothing like expectations: "He's going in there to debate a leviathan of forensics, who has debated five times and she's undefeated in debates," Biden spokesman David Wade says of Biden's chances against Palin, per ABC's Matt Jaffe, Imtiyaz Delawala, and Nitya Venkataraman.

On Biden's strategy: "If she makes a gaffe, he underplays it," one of the people prepping Biden for his vice presidential debate tells Politico's Roger Simon.

Can Palin still be Palin? "Off script, though, Palin has become increasingly tentative. Last week, when a member of the press pool asked Palin a question at the outset of a meeting she and McCain were holding with the presidents of Georgia and Ukraine, she looked to McCain, who shook his head, and she stayed silent," The Washington Post's Juliet Eilperin writes.

Which is more dangerous? Palin being Palin, or Biden being Biden?

"Unlike his Republican counterpart, Alaska Gov. Sarah Palin, Biden has not been shy about talking to reporters, but comments he has made since Obama chose him last month have presented Democrats with their own problems and revived the longtime senator's reputation for gaffes," Perry Bacon Jr. writes in The Washington Post.

The Sked:

Barack Obama holds an 11 am ET rally in Reno, Nev.

John McCain holds a roundtable discussion in Des Moines at 11 am ET (and isn't coming back to Washington this time -- not yet, anyway).

Sarah Palin is down in Sedona, Ariz. at the McCain ranch, preparing for the Thursday veep's debate.

Joe Biden continues his debate prep in Wilmington, Del. with no public events scheduled.

Former House Speaker Newt Gingrich, R-Ga., outlines his plan for the economic mess at a 10 am ET speech at the National Press Club in Washington.

Also in the news:

The woman behind those e-mail forwards out of Wasilla: "[Anne] Kilkenny, 57, lives with her husband and son in a one-level home surrounded by raspberry bushes, crab apple trees, birch and fireweed," Erika Hayasaki writes for the Los Angeles Times. "She speaks in a high-pitched voice, cheerful as a grade school teacher, pausing for deep breaths between thoughts. She parts her steel gray hair down the middle, wears ankle-length skirts, irons meticulously and grows potatoes and asparagus in her backyard."

Can we settle it over the poker table? "John McCain bet with $100 chips. Barack Obama threw nickels around like they were manhole covers," Christi Parsons and Ray Long write in the Chicago Tribune. "Maybe that's why Obama thinks it's a subject worth harping on -- even though both men played in the company of lobbyists."

Troopergate update: "A lawsuit aimed at freezing the Legislature's abuse-of-power investigation of Gov. Sarah Palin hits the courtroom this week," per the Anchorage Daily News' Kyle Hopkins. "The lawyer representing five Republican lawmakers who filed the case says he may try to put the state-hired investigator -- or Anchorage Democratic Sen. Hollis French, who is overseeing the investigation -- on the witness stand. A Superior Court judge on Monday combined the case with a similar lawsuit filed by the attorney general. Both suits argue the legislature doesn't have the authority to investigate Palin."

Remember Rezko? "Convicted political fixer Antoin "Tony" Rezko has been quietly visiting Chicago's federal courthouse, setting off speculation that he may be spilling secrets to prosecutors in return for a lenient sentence," the AP's Mike Robinson reports.

Really? North Dakota? "North Dakota hasn't voted for a Democrat for president since Lyndon Johnson in 1964, but observers across the political spectrum here say it's too soon to color the state red in November," per USA Today's Andrea Stone. "Nearly twice as many Democrats as Republicans turned out in February for party caucuses that gave wide margins of victory to Obama and McCain's then-rival, former Massachusetts governor Mitt Romney."

He's sorry: "Florida Democratic Congressman Alcee Hastings issued a statement Monday indicating that he regrets saying that 'gun toting' Sarah Palin 'don't care too much' about Jews and blacks while still maintaining that the policies and priorities of a McCain-Palin administration would be 'anathema to most African-Americans and Jews,' " per ABC's Teddy Davis and Rigel Anderson.

The Kicker:

"Give me those 12 people's names and I will go speak uncharacteristically nice to them." -- Rep. Barney Frank, D-Mass., mocking GOP accusations that Nancy Pelosi's floor speech pushed a dozen Republicans to vote against the bailout bill.

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