When Mr. McCain Came to Washington

Inside the White House meeting where Obama called McCain's bluff: 'I could see Obama chuckling'

By HENRY M. PAULSON JR.
WSJ

With the stock market in freefall and the country headed for a crippling economic recession, Treasury Secretary Henry Paulson proposed the $700 billion Wall Street rescue plan to Congress on Friday, Sept. 19, 2008. By the following Monday, the Troubled Asset Relief Program was meeting resistance on all sides. Mr. Paulson's next few days, marked by little sleep and no exercise, were frantic with meetings and private phone calls on behalf of the legislation. The efforts to pass the stimulus legislation took a surprising twist on Wednesday, Sept. 24, while addressing the House Financial Services Committee, a member of Mr. Paulson's staff passed him a note telling him that Republican presidential candidate John McCain had suspended his campaign to come to Washington and focus on the financial crisis. The following is an adaptation from "On the Brink," Mr. Paulson's new memoir.

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Federal Reserve Chairman Ben Bernanke and I were besieged with questions from all sides. There was no doubt about it — the session wasn't going well. To top that off, my communications adviser Michele Davis passed me a note that said in part, "If you get a question, just say that you know that both Senators McCain and Obama recognize the seriousness of the situation." I turned around and looked at her, stunned. This was crazy.

When the hearing recessed, I went into [Democratic Massachusetts Rep.] Barney Frank's office and called [White House Chief of Staff] Josh Bolten to tell him in no uncertain terms that I thought it was dangerous for McCain to return. Josh said the White House was equally frustrated. McCain wanted a meeting at the White House, and the president felt he had no choice but to accommodate him.

I called Obama right away. He said that he would try to be as constructive as possible but that the Democrats were doing their part and I had better keep in touch with McCain. The president was scheduled to give a major speech that evening making the case for TARP, but news of McCain's decision to suspend his campaign dominated the rest of the afternoon.

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