Progress Illinois

Bailout Bill Rejected, Stocks Plunge
In a stunning turn of events, the stock market plummeted yesterday after the House of Representatives defeated a proposed $700 billion financial-rescue package. The Dow Jones Industrial Average dropped almost 800 points, its biggest point one-day dip in history. Congress is not in session today, due to Rosh Hashanah, but it's unclear what next step congressional negotiators plan to take. The Bush administration will likely try to convince the House GOP rank-and-file that a bailout is necessary.  But if Republicans don't budge, the White House may be forced to offer Democrats enough progressive concessions to build wider liberal support.

After Deal's Collapse, McCain Attacks
After "suspending" his presidential campaign last week to ensure the bailout bill’s passage, John McCain tried vainly yesterday to "contain the potential for damage," according to the New York Times. The campaign went on the offensive, laying blame at the feet of Barack Obama and Nancy Pelosi for "infusing unnecessary partisanship into the process." Yet most editorial pages criticized McCain and the Republican caucus for defeat of the measure. "Republican no votes were rooted less in analysis or principle," wrote the Times, "than in political posturing and ideological rigidity."

GOP Loves Palin, Others Not As Excited
While she still excites the GOP base, vice presidential candidate Sarah Palin's star is losing some of its luster. While an NBC News/Wall Street Journal survey in early September showed a 20 point net positive rating, that gap faded to 6 points by last week.

Rezko Court Appearance Fuels Rumors He's Cooperating
It was only a matter of time, but attorneys believe convicted political fundraiser Tony Rezko has been visiting Chicago's federal courthouse, setting off speculation that he may be cooperating with federal prosecutors in exchange for a lenient sentence. Two lawyers said Monday prosecutors had contacted them to check information that only Rezko could have told them. 

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House Debates Bailout Proposal
Following weekend negotiations, the U.S. House is now debating a proposed $700 billion bailout of the financial services industry.  However, members from both sides of the aisle are said to be wary of the bill and many predict that the vote later today will be extremely close.

Feds Oversee Another Bank Buy-Out
The Federal Deposit Insurance Corporation (FDIC) has stepped in and brokered the second major bank sale in a week to avoid another major corporate failure in the midst of the ongoing financial crisis. Citigroup has agreed to buy Wachovia, the FDIC announced this morning. This move concentrates the large majority of America bank deposits within three institutions: Citigroup, Bank of America, and JP Morgan Chase.

Analysts Say New Jobless Figures Won't Be Pretty
New unemployment figures for September are due out this week and they're likely to contain more bad news. The Labor Department's jobs report is the last one to be released before the Nov. 4 election. Some say that the new data could help Democrats, who have made economic turmoil a central campaign theme.

State Budget Cuts Hang In The Balance
Despite state legislators voting to restore $220 million worth of budget cuts -- from drug treatment programs to keeping state parks open -- the future of those programs remain unknown. That's becuase of uncertainty about how the governor will respond to a plan to tap earmarked funds to pay for the cuts at a time when state revenues are down.

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WaMu Failure Marks Largest Bank Failure in U.S. History
As a series of financial firms including AIG and Lehman Brothers fell to bankruptcy and takeovers last week, the question loomed: Who's next? Today, we learned that federal regulators have seized Washington Mutual and struck a deal to sell the bulk of its operations to J.P. Morgan Chase, marking the largest bank failure in U.S. history.

Suburban Congressional Leaders Split Over $700 Billion Proposal
Suburban Chicago congressional leaders are weighing in on the Treasury Department's bailout proposal, and much like their colleagues in D.C., they have yet to find consensus on the terms of the proposed $700 billion in assistance for cash-strapped lending institutions. Meanwhile, constituents are giving some other Illinois congressional leaders an earful about why they oppose the bailout plan.

IL Toll Chief Takes Job With State Contractor
While state law puts a one-year reprieve on state workers' ability to join companies to which they awarded taxpayer-funded contracts, Illinois tollway chief Brian McPartlin yesterday announced that he's taking a job with a company that did more than $30 million in business with the tollway.  Can you say "loophole"?

CN Files Suit To Speed Up EJ&E Purchase
Canadian National Railway on Thursday made good on its promise to go to court to force a federal regulatory decision on its proposed purchase of the Elgin, Joliet & Eastern Railway. The Montreal-based railway filed a petition urging a federal court to require the Surface Transportation Board to rule on the transportation merits of the purchase by the end of the year. Time is running out for CN to make the purchase, as EJ&E owner U.S. Steel told CN in July that it would not extend the $300 million stock purchase agreement past Dec. 31.

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Presidential Candidates To Meet With Bush
With hopes of boosting support for an increasingly controversial $700 billion Wall Street bailout, President Bush hit the prime time airwaves last night with the warning:  “Our entire economy is in danger.”  This afternoon he'll meet with the presidential candidates to mull over the proposed bailout package, but many on Capitol Hill are skeptical that the meeting will accomplish much.

The $700 Billion Question: What's It Worth?
While the Treasury Department pushes a plan to spend up to $700 billion worth of taxpayer money on troubled investments, there's still no clear figure on how much the assets are actually worth. Not even Wall Street has been able to put a price tag on them. Some say that the unanswered question heightens the investment risk for taxpayers.

Out To Save The Economy Or His Campaign?
If McCain hoped to come off looking as if he is "rising against politics" by announcing that he'll suspend his presidential campaign and attempt to wiggle out of Friday night's debate, it doesn't appear to be working. Instead, the GOP candidate is drawing criticism for the "somewhat desperate" attempt to shake up the race just as his poll numbers hit the skids.

Daley To Meeks: Back Off Wrigley Protest
State Sen. James Meeks says he'll take the debate over school funding -- along with 6,000 demonstrators -- to Wrigley Field during the Cubs' opening playoff game even after Mayor Richard Daley asked him to back off.  "We’ve waited 100 years to have [school] funding reform. I’m surprised that the mayor . . . would put more emphasis on a game than on peoples’ lives. These kids are being miseducated. They’re killing each other. A game is not more important than the future of public school children," Meeks said.

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Bailout Plan Faces Congressional Resistance
As the White House and Treasury Secretary Henry Paulson tried to persuade Congress to accept its massive economic bailout plan Tuesday, rank and file Democrats expressed deep skepticism about the lack of provisions to protect taxpayers. Sen. Barack Obama shared the opinion of many in his party when he said yesterday that President Bush must drop his "my way or the highway" attitude toward the proposed $700 billion bailout. He also outlined some conditions for backing the plan: companies that take a bailout must slash their executives' salaries, taxpayers must be given an ownership stake in the companies that are bailed out, a new fee on financial services should be created to repay the government aid, and an independent, bipartisan board should provide oversight on how the money is spent.

McCain Could Be Key To Bailout's Future
Meanwhile, growing House Republican doubts could make it impossible to build enough support for any proposal to pass quickly. Some in the party are looking for leadership from presidential nominee John McCain, whose stance on the legislation could prove decisive to its passage. Like his presidential rival, McCain told reporters he might vote no if measures weren't included to protect taxpayers. 

Blagojevich-Backed Ethics Bill Approved
Despite concerns that the bill needs more work, the Illinois Senate voted 50-1 yesterday to expand ethics legislation favored by Gov. Blagojevich. If approved by the House, the measure would ban state contractors from contributing to any state officeholder -- not just those in control of their contracts -- and would bar lawmakers from holding other government jobs. Another provision would require lawmakers to vote on pay raises based on a straight-up, yes-or-down vote. 

Senate Sends $220 Million Economic Assistance Bill To Blago
Intended to ease the pain of the governor's budget cuts, the Senate also passed a $220 million bill during yesterday's session that would restore cuts to the budgets of Chicago area mass transit, state parks, and drug treatment facilities. Sen. Donne Trotter (D-Chicago) told the Tribune that while he was confident Blagojevich would sign the bill, "there are no assurances he would embrace the funding priorities."

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Plan B? Uh, We're Working on That ...
While lawmakers haggle over the details of a $700 billion bailout of cash-strapped lending institutions, some are beginning to ask: if the U.S. Treasury's plan to stabilize world financial markets doesn't work, what's 'Plan B?'  Aside from potentially throwing more money at the problem, there apparently isn't one.

Suburban Chicago Lawmakers Instrumental In Finalizing Bailout Plan
U.S. Reps. from the Chicago suburbs will have considerable clout in deciding how the government spends the proposed $700 billion bailout. That's because five of the 70-member House Financial Services Committee, which is charged with hashing out the proposal, are from the region. Despite pressure to sign off on the plan quickly, most of those members say they're still deciding where they stand on key points in the proposal.

Immigration Down in Illinois, Nationwide
Growth in Illinois' immigrant population slowed last year, following a national trend of declining immigration. A sour economy and increasedfederal enforcement are cited as reasons for the decline.

Ethics Reforms On The Books
The Illinois Senate voted unanimously to override Gov. Rod Blagojevich's amendatory vetoes on two key pieces of ethics reform legislation yesterday. Beginning next year, companies and individuals that do upwards of $50,000 worth of business with the state are banned from making campaign contributions to all state officeholders, candidates for state office, and political parties.

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Obama, Dems Want More From Wall Street Bailout
Presidential nominee Barack Obama urged lawmakers to reach a bipartisan agreement on the Bush Administration's $700 billion plan to save the financial market, but warned that as it stands, the proposal is a "concept with a staggering price tag -- not a plan." Democratic congressional leaders have said any bailout should include beefed-up congressional oversight, aid for individual homeowners and changes to bankruptcy laws. They also want to see limits placed on the pay of executives whose financial firms unload its bad debts on the government.

Candidates Prep For First Debate
After months of TV ads and stump speeches, Barack Obama and John McCain will finally square off in a debate this Friday evening. To prepare this week, Michael Steele -- the former lieutenant governor of Maryland and a prominent black Republican -- will take part in mock debates with McCain, mimicking the speaking patterns and tactics of the Democratic nominee. Greg Craig, a Washington lawyer, former Clinton administration official, and one of Obama's few gray-haired advisers, will stand in for McCain.

Obama Fundraising In Chicago
Tonight, Barack Obama is scheduled to attend two fundraisers in Chicago, a metropolitan area that has already given him $17.5 million, according to the Center for Responsive Politics. The first event, with minimum admission of $1,500, will be held at The Standard Club. State Treasurer Alexi Giannoulias is hosting the second soiree, which has a $28,500 admission price. These events are crucial as both campaigns have raised comparable dollars thus far.

State Senate Returns To Springfield
State senators are venturing back to the Capitol this morning to consider an override of Gov. Rod Blagojevich's veto of major campaign finance reform legislation. But according to Senate President Emil Jones, lawmakers may also discuss efforts to stave off layoffs of state workers and the closings of parks and historic sites resulting from Gov. Blagojevich's budget cuts.

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Wall Street Ends Week On A High Note?
Investors are optimistic that the markets are headed for a rebound today following news that the U.S. government will back American money market mutual funds and unveil additional measures to rescue troubled banks from their growing debts. The government plan is anticipated to free up lending as loans have become increasingly tough to come by amid the market meltdown. The Securities and Exchange Commission also announced a temporary ban on short-selling --  a practice in which investors bet against stocks for quick profits -- of nearly 800 insurance and other financial stocks.

Obama And McCain Stump On Increased Financial Oversight
Barack Obama and John McCain hit the campaign trail hard with two distinct messages about how the government should step in to reverse an impending financial crisis. While Obama called for more regulations on financial industries, McCain ireiterated his pledge to fire SEC Chairman Christopher Cox for being asleep at the switch. Obama mocked his rival's recommendation yesterday as too little, too late: "In the next 47 days, you can fire the whole trickle-down, on-your-own, look-the-other-way crowd in Washington, who has led us down this disastrous path ... Don't get rid of one guy. Get rid of this administration. Get rid of this philosophy."

Vacation's Over: State Legislators Called Back to Work
Shortly after Senate President Emil Jones announced that he would be calling his chamber back next week to take up pending ethics legislation, Gov. Rod Blagojevich disclosed his plan to call a special session next Monday.  The governor said he is summoning both the House and Senate back to Springfield to "enact real ethics reform" and "improve transparency" in the state capitol. While downstate, legislators are also likely to face pressure to consider a proposal to lease the state lottery to free up public works spending and look at ways to restore deep budget cuts.

Meeks Wants To Play Hardball
State Sen. James Meeks says he plans to bring as many as six thousand school funding reform advocates to demonstrate at Wrigley Field during the Chicago Cubs Oct. 1 playoff game. The protest would be aimed at bringing the debate over inequitable school funding to a national stage.

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Central Banks Announce $180 Billion Credit Line To Encourage Lending
In a move aimed at easing a worldwide credit crunch, the U.S. Federal Reserve announced this morning their decision to pump $180 billion into a consortium of central banks that will, in turn, provide new lines of credit to firms who would otherwise face tougher borrowing terms. Some global markets -- from Asia and Europe to U.S. futures -- got an initial bounce from the decision. But it remains to be seen if short-term lending strategy will do enough to help Wall Street recover from this week's historic losses.

'The Big Three' Hit The Hill, Hat In Hand
Chief executives from GM, Ford and Chrysler met with Democratic leaders on Capitol Hill yesterday asking for $25 billion worth of government loans to prop up the struggling auto industry. The execs took pains to distinguish themselves from other major institutions who have also recently looked to the government for financial help. Detroit wants to tap into yet-to-be appropriated loans already authorized by Congress to facilitate the production of more hybrid and fuel-efficient vehicles.

Does McCain Know Who The Spanish President Is?
In an interivew this week with a Spanish-language radio station, John McCain was asked about how his White House would receive Spanish President Jose Luis Rodriguez Zapatero.  As Talking Points Memo concludes, his answer revealed that he "either doesn't know who the Prime Minister of Spain is, thinks Spain is a country in Latin America, or possibly both."

Blagojevich A No-Show At Doomed State Parks, Historic Sites
Gov. Rod Blagojevich will no doubt take some lumps today following an AP report that notes he's never visited or held official events at any of the 11 state parks or 13 historic sites that he targeted for closure this fall to help shore up a $2 billion state budget deficit. 

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McCain Struggles To Address Economic Crisis
Fostered by his own admissions as recently as last year that economics is not his forte, John McCain has struggled to adress the nation's economic woes with the right tone or substance. On Monday, in the wake of the recent Wall Street tumult, McCain repeated a phrase he had used many times before -- that he believed the fundamentals of the economy were “strong.” Yesterday, he backpedaled, calling the economic situation “a total crisis” and denouncing “greed” in the financial industries. Today, he put out a new ad with the tag line: "I've taken on tougher guys than Wall Street."

Obama Looks To Capitalize On Economic Woes
Not surprisingly, Barack Obama has looked to shift the focus of the campaign to the economy, calling for greater regulation and stronger oversight in the financial sector after the collapse of multiple Wall Street firms. He is also using the nation’s worsening economy to draw distinctions between him and his Republican rival. "Let’s be clear,” Obama said in Colorado yesterday. “What we’ve seen the last few days is nothing less than the final verdict on an economic philosophy that has completely failed."  This morning, the Obama campaign released a two-minute ad on the economy that they plan to run in battleground states.

House Passes Bill To Expand Drilling, Fund Renewables
The House passed a package of energy initiatives yesterday, including measures that would finance alternative energy development and allow offshore oil drilling as close as 50 miles off the Atlantic and Pacific coasts. The vote fell along party lines, with Republicans rejecting the bill because it would prohibit exploration of oil reserves closer to the coasts and in the Gulf of Mexico. In the Senate, the legislation will compete with three alternative proposals, none of which are likely to pass the 60 vote threshold.

State Park Closings Pushed Back Four Weeks
Due to budget cuts, more than a dozen state parks were slated to close November 1, despite uproar from local residents and outdoor enthusiasts. But yesterday, state officials announced that the closings had been put off until the end of November, citing union issues.

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