What happens next?

A grave burden that will limit options for the new president

Massive in cost and scope, the financial rescue plan would affect the priorities on Capitol Hill for years. (KAREN Bleier/AFP/Getty Images)

WASHINGTON - When the extent of President Bush's financial bailout plan began emerging yesterday, the nation's lawmakers seemed to react with a collective intake of breath.

It was a gasp over how vast the Wall Street crisis must be to motivate Treasury Secretary Henry M. Paulson to seek such broad authority.

It was a gasp at the size of the check requested from Congress to cover bad debts - $700 billion - and the way it could alter the nation's budgetary priorities for the immediate future.

And, for many, it was a gasp of hesitation from those who are well aware that Bush has faced big crises before, and that his calls for quick, sweeping action haven't always brought good results.

While Bush's declaration of "a pivotal moment" echoed his earlier rhetoric about very different challenges, political reaction was more closely epitomized by the two men who could be even more affected by the economic crisis: Democratic presidential nominee Barack Obama and Republican nominee John McCain. Both called for a quick response to maintain economic stability, but neither endorsed Bush's plan.

"I've spoken with Secretary Paulson and look forward to reviewing the full administration proposal, as well as any modifications that might emerge in congressional negotiations," said McCain in a prepared statement, asking that lawmakers consider his own proposal for intervening in troubled financial institutions and imposing new regulations.

Obama, campaigning in Florida, declared that Congress must vet Bush's proposal to "make sure whatever plan the government comes up with works not just for Wall Street, but for Main Street."

Whatever its final form, the plan will almost certainly serve to tie the hands of the next president. The projected federal deficit rose sharply this summer to $500 billion, and the new authorization requested by Bush would roughly equal the entire cost of the five-and-a-half-year Iraq war.

With an already out-of-balance budget and mounting debt relief expenses, the next president will be obliged to reconsider his own spending priorities.

Obama's vow to provide health insurance for all Americans would be sure to come under renewed budgetary scrutiny, and McCain's plan to make permanent Bush's tax cuts, along with his extended commitment to the Iraq war, would surely face greater opposition.

As in the run-up to the Iraq War, Bush has used the financial crisis to justify expanding the powers of the presidency. His proposal would give the Treasury secretary the latitude to do as he sees fit with whatever debts the government purchases. While Congress is already seeking to impose some restrictions, the next administration would almost certainly be burdened with unpopular choices that could affect average Americans' home mortgages, school loans, and retirement plans.

And while lawmakers yesterday were grappling with the size of the crisis, the extent of the response, and their level, or lack, of faith in the president, they probably also were considering the effects on their own careers.

Like all major crises, this one, coming in advance of a much-awaited election, is sure to be felt on the campaign trail. Both McCain and Obama already have been running as agents of change, but Obama appears to have gotten more of a boost from voters' disgust with the government's failure to rein in financial institutions.

The crisis has cast a harsh light on a philosophy of deregulation that has adherents in both parties, but has been a staple of Republican free-market ideology since before McCain's birth 72 years ago. Nonetheless, plenty of Democrats in Congress could be blamed for failing to foresee the crisis. And so incumbents of both parties will have to run a little harder from now until November. McCain, whose party controls the White House, will have to do even more to distance himself from its policies.

So far, the presidential race has focused extensively on the life stories of the two candidates and their running mates. The government bailout of Wall Street will shift the focus onto more grounded concerns - both domestic and overseas, where increasing amounts of the American government's debts are being held in unfriendly nations.

If they needed any further encouragement - what with a war in the Middle East and high energy costs at home - voters now have another solid reason to come to the polls.

And they may leave lawmakers gasping yet again.