From NBC/NJ's Matthew E. Berger
SEDONA, Ariz. -- In between her debate-prep sessions here, Palin called into the conservative Hugh Hewitt radio program Tuesday, decrying the lack of journalism ethics and repeatedly referring to herself as "Joe Six Pack."

Oct. 1: Sarah Palin, right,  in Sedona, Ariz. with Randy Scheunemann, senior policy adviser for the McCain-Palin campaign, prepares for her Thursday night debate with Democratic counterpart Joseph Biden.

The interview comes amid new concerns that Palin is losing support among conservatives, as several prominent commentators have suggested she is unqualified for the vice presidency. The conversation touched on many of the key issues that made Palin popular in conservative circles when she was first named -- including her faith, support for Israel, and her decision to have a baby born with Down syndrome.

Palin linked herself to the financial situation many Americans now face, telling Hewitt: "I know what Americans are going through. Todd and I, heck, we're going through that right now even as we speak, which may put me again kind of on the outs of those Washington elite who don't like the idea of just an everyday, working-class American running for such an office." The governor of Alaska received a salary of $112,895 in 2007, according to stateline.org. The McCain campaign has not released the Palins' financial records.

"We've gone through periods of our life here with paying out of pocket for health coverage until Todd and I both landed a couple of good union jobs," she added. "Early on in our marriage, we didn't have health insurance, and we had to either make the choice of paying out of pocket for catastrophic coverage or just crossing our fingers, hoping that nobody would get hurt, nobody would get sick. So I know what Americans are going through there."

She said her family probably took a $20,000 hit in the stock market last week, mostly through Todd's 401K plan.

Palin's chat with Hewitt was on much friendlier terrain than the Republican vice presidential nominee has appeared on in recent weeks, with evening news anchors Charles Gibson and Katie Couric. Hewitt asked about the "virulent opposition to you on the left" because of her position on abortion, and asked whether "the mainstream media and the left understands your religious faith?"

Palin was asked in the interview about her reaction to "extreme hostility" from the media. "I think they're just not used to someone coming in from the outside saying you know what -- it's time that normal Joe Six Pack American is finally represented in the position of vice presidency," she said. "And I think that that's kind of taken some people off guard, and they're out of sorts, and they're ticked off about it, but it's motivation for John McCain and I to work that much harder to make sure that our ticket is victorious."

Also in the interview, she told the conservative radio host that she does not belong to any church -- in an apparent attempt to separate herself from several of the churches she has been known to attend, one where she received a blessing against witchcraft and another under fire for promoting an event to convert gays and lesbians.

"I think that there's a lot of mocking of my personal faith, and my personal faith is very, very simple," she told Hewitt, according to a transcript released by the campaign. "I don't belong to any church. I do have a strong belief in God, and I believe that I'm a heck of a lot better off putting my life in God's hands, and saying hey, you know, guide me."

The senior pastor of Wasilla Bible Church told Newsweek magazine earlier this month that Palin and her family regularly attend church there and have for six years. Another pastor said her youngest child, Trig, was "dedicated" at the church before she was nominated for vice president. But several Internet videos have shown Palin speaking and receiving prayers at Wasilla Assembly of God, where she said the war in Iraq was a "task that is from God" and received a prayer from a guest preacher asking she be protected from witchcraft.

Palin also reminded Hewitt of her own background as a reporter, but said she learned things differently. "Well, I have a degree in journalism also, so it surprises me that so much has changed since I received my education in journalistic ethics all those years ago," she said. "But I'm not going to pick a fight with those who buy ink by the barrelful. I'm going to take those shots and those pop quizzes and just say that's okay, those are good testing grounds."

Palin has been camped out all day at McCain's Sedona ranch, where campaign officials said she is preparing "outdoors near a creek." Campaign aides said it was a "relaxed environment," joined by her husband and four younger children.

From NBC's Mike Viqueira
Some points, in case they aren't obvious by now...

-- They are going to try again by the end of the week
-- It probably WON'T be Thursday. Most House members don't come into town until that evening. Any new proposal would have to go through the same closed door explanation process that we saw Sunday night. Thursday night is not impossible, however, and it has not been ruled out. But most likely Friday.
-- The FDIC expansion and the mark to market rule change that is being considered by the secretary (hearing that from both R and D on House side) are significant for Republicans. Notice the Boehner statement on FDIC, where he says that Democrats rejected Blunt in negotiations when he proposed it. Dems question that version of events, but Boehner may be phrasing it that way to portray it as a Republican victory.
-- On the Dem side, extension of unemployment benefits is something that could help with liberals and is being considered. Also, strengthening of the fee that would be imposed on companies whose assets do not improve after five years might be strengthened.
-- A top Republican source says that he thinks votes are there and gettable, with some help from a few Dem switches.
-- All sides agree that tweaks are going to be relatively minor.
-- Blunt and Hoyer to meet face-to-face tomorrow.

Boehner's statement: "The presidential candidates' support for increasing the FDIC cap is welcome news. Increasing the FDIC cap is a proposal put on the table by Roy Blunt and House Republicans but ruled out by Democrats during the negotiations that led to yesterday's unsuccessful vote."

Pelosi and Reid also wrote a letter to the president, in which they make nice and welcome his statement this morning:

Dear Mr. President:

Yesterday's defeat of the Economic Emergency Stabilization Act resulted in additional severe economic impacts both on Wall Street and on Main Street. The consequences of yesterday's vote -- an historic drop in the stock market and the loss of $1.2 trillion in savings, investments, and retirement funds - had a major impact on American families, small businesses, and others that demonstrated the imperative for Congressional action.

We have already made much progress in improving the plan originally sent to Congress. After many days of discussions, we reached bipartisan agreement on key additions, including strong measures to protect taxpayers from the costs of this program; to impose tough accountability on Wall Street through strong oversight and transparency; to limit excessive executive compensation and golden parachutes; to reduce home foreclosures to help families remain in their homes; and to sequence the funding of the program to ensure appropriate cost controls and independent reviews.

We must continue our bipartisan efforts of the past two weeks to pass a comprehensive bill to help stabilize our financial system and protect the American taxpayer. We welcome your statement this morning and are committed to working with you and our Republican colleagues to enact a bipartisan bill without further delay.

Working together, we are confident we will pass a responsible bill in the very near future.

Sincerely,
Nancy Pelosi Harry Reid

From NBC/NJ's Mike Memoli
WILMINGTON, Del. – It appears that neither cheesesteak-craving vice presidential candidate is safe from voters' questions.

Joe Biden took a break from debate prep this afternoon to enjoy a meal with his son, Beau, at the Charcoal Pit, a diner just outside Wilmington known for its burgers and milk shakes. As Beau ordered a cheesesteak (hold the onions) for his dad, Biden made a loop of the diner, where he said he's been hanging out since high school.

"This is the usual luncheon crowd!"  Biden said as he greeted Bert Boyle, who was manning the cash register. "Sorry to bring all this on you," he added, referring to the media.

One day after Sarah Palin complained of "gotcha journalism" based on questions she faced during a retail stop in Philadelphia, Biden answered some voters' concerns about the state of the economy.

"It's real trouble," Biden told a worker from a local auto parts company who asked about "economic stuff."

"What people are going to do if they don't get this done, people are going to lose their jobs, their pensions," he said.

The Delaware senator said that if the bailout package works "the right way," it would all be paid back. "It's not a seven hundred dollar, seven hundred billion dollar check," he said, comparing the original plan to the past savings and loan bailout. "We bought the bad loans, when the market came back, we sold it and made a profit."

As he exited the restaurant after lunch, he expressed hope that lawmakers could eventually pass a working bill. "We need to," he said.

Biden enjoyed a half hour lunch with his eldest son, as well as his daughter-in-law, Hallie, and granddaughter, Natalie. Beau Biden is being deployed to Iraq soon, with a deployment ceremony scheduled for Friday, one day after the vice presidential debate. Biden is expected to speak at the ceremony.

From NBC's Lee Cowan
RENO, Nev. -- In an interview today with NBC News, Obama said House Democrats kept up their end of the deal to pass the rescue plan, but did not place blame squarely on the other side.

"I think that, the key now is just to not worry about credit blame publicity, let's just do the spade work to actually get this immediate crisis passed," he said, but added, "There was an agreement between Democratic leader Pelosi and Republican leader Boehner in the House that each side was going to come up with a certain number of votes and the Democrats, I think their number was 120 and they came up with 140."

Obama also hinted that had he known earlier the deal was going down to defeat he would have worked the phones even harder, especially given that some of those who voted no, were some of his early supporters.

"At this point, knowing that the Republicans may not be able to muster all the votes they had promised, if we need additional votes to get this done, then I'm going to do everything I can to make sure that that happens," he said, "because I think it's important for the country regardless of what the political alignments are."

While McCain has offered many of the same suggestions of late to help make the bailout more palpable, the Illinois senator said there have been no discussions about offering joint legislation with McCain in the Senate.

"You'll recall that when Sen. McCain suggested he would suspend his campaign and we would go to Washington, it created sort of a flurry of media," he said. "But, what we didn't see is the kind of focus on just getting the job done that was necessary. That's why I've deliberately tried to stay behind the scenes in the work that I have done."

From NBC's Carrie Dann and Jeff Hanley
With many of the players still pointing fingers over which party lacked discipline in whipping up support for the bailout yesterday, yet another look back at the roll call vote offers a few numbers to keep in mind.  

Of the 47 House Dems who endorsed Obama BEFORE Super Tuesday, Feb. 5, 26 voted in favor of the bailout legislation. That leaves 21 -- almost half of the original Obama loyalists -- who voted against the bill he supported.

Two powerful House caucuses were also split. The Congressional Black Caucus voted 18 Yea votes to 21 Nays. The Hispanic Caucus also voted down the bailout, with eight members voting  in favor and 12 voting against the bailout.

But is any of this a measure of the loyalty Barack Obama commands? Or was it the threat of a tough re-election race that was ultimately the best predictor of support or opposition to the bill?

Of 38 incumbents in House races rated by the Cook Political Report as competitive or Toss Ups, 30 voted against the bailout. That's all but five of 17 Dems in tough reelection races, and all but three of 21 Republican incumbents running for another term. And, as First Read noted this morning, most retiring members not running for office -- 19 out of 24 -- voted in favor of the recovery bill. 

From NBC/NJ's Athena Jones
RENO, Nev. -- In a sweeping speech in battleground state Nevada, Obama made a direct appeal to the American people and to members of Congress to support the $700 billion rescue plan that failed to pass in the House of Representatives yesterday.

It was the first time since the need for such a rescue became clear that the Democratic nominee explained in direct and explicit terms what a total collapse of the credit markets would mean for ordinary people, many of whom are fiercely opposed to the bailout bill.

Quoting Franklin D. Roosevelt, Obama called on Americans to show the "confidence and courage" that he said were essential to the success of the plan. He asked people to believe in the country even if they are angry or anxious about the current crisis. And he tied the rescue plan to his own agenda, spelling out his plans to cut taxes, make health care and college more affordable and promote clean energy, including clean coal.

With an eye to casting the bailout deal as a time for patriotic action to save the American economy, Obama did not once mention John McCain. He said that now was not a time for politics or for taking credit or laying blame, and he compared the situation to putting out a fire in a neighbor's house so that it would not spread to others. "We've got to make sure that we put the fire out and then go start making sure that these folks stop leaving the stove on," he said. "But right now our job is to put out the fire and we can't forget that."

Obama said this was no longer just a Wall Street crisis, but an American crisis and that failure to pass a rescue plan could mean thousands of businesses could close around the country, millions of jobs could be lost and a long and painful recession could follow.

"Because of the housing crisis -- and nobody's been hit harder by foreclosures in the housing crisis than Nevada -- we are now in a very dangerous situation where financial institutions across this country are afraid to lend money," he told the crowd gathered on a lawn at the University of Nevada at Reno. "If all that meant was the failure of a few big banks on Wall Street, that'd be one thing.  But that's not what it means.  What it means is that if we do not act, it will be harder for you to get a mortgage for your home or the loans you need to go to college or the loan you need to buy a car to get to work.  What it means is that businesses won't be able to get loans they need to open new factories, or hire more workers, or make payroll for the workers they have."

Obama has shown a new energy over the past two days when it comes to speaking about the financial crisis on the stump. Throughout his roughly 35-minute speech today, he used analogies and humor to try to explain the predicament facing the American economy and how it related to them. He told college students that even though they may not have big stock market portfolios, failure to stop this credit crisis would make it harder for them to get a job, buy a house and raise a family.

The senator promised to do all he could to help get a plan passed, saying he had spoken with Bush and Senate Majority Leader Harry Reid about the deal today and urging Congress to "do what's right for this country."  He also pointed out the proposal he put forward today to try to improve the bill, expanding the FDIC insurance for bank accounts to $250,000, from the current $100,000, something he said would help small businesses make payroll.

When asked why it had taken the Democratic nominee so long to spell out the problem facing the credit markets in clear, relatable terms to voters, a spokesperson said that throughout the week, Obama had sought to take a responsible approach to the crisis and that he could not speak about the consequences of not passing a bill when a deal on the bill had not yet been reached. 

"What was clear from yesterday was that people are nervous, people are concerned about what this would mean," said spokesperson Jen Psaki. "Why he's talking about the implications of this not passing is that he wants to convey to the American people that this is something that we need to pass."

From NBC's Domenico Montanaro
In a Web advertisement running on Web sites like Drudge, Beliefnet, the American Prospect and MyDD, the Democratic National Committee is highlighting McCain's gambling after a Sunday New York Times story. The DNC also launched its latest round of gimmickry passing to reporters a package with: phony $100 bills with the image of a tuxedoed, fighter-posing McCain (on the back it reads "In gambling lobbyists McCain trusts"); dice, and chips with McCain's face on it.

From NBC/NJ's Adam Aigner-Treworgy
DES MOINES, Iowa – After making the rounds of the morning cable news shows, McCain held an economic roundtable this morning and reiterated his call on the Bush administration for immediate action.

"Inaction is not an option," McCain said. "In light of the House's failure to act, this morning, I spoke to the president about two things that the administration has not done, but should do following the inaction of Congress."

In addition to raising the deposit insurance cap from $100,000 to $250,000 – something both McCain and Obama have suggested – McCain called on the treasury to use its Exchange Stabilization Fund as "creatively as possible to provide backstop" for financial accounts. He also pointed to the authority granted to the government in the recent housing bill to purchase nearly $1 trillion in mortgages and mortgage backed securities as a short term solution until a bill can be negotiated that will bass through congress.

"The Administration can take these actions with the stroke of a pen to help alleviate the crisis gripping our economy," McCain said. "I urge them to do so."

Renewing a call for bipartisanship that has spanned several days, McCain once again told several-hundred local employees gathered at EFCO Forms for the roundtable that this was not the time to place blame.

Video: Senator John McCain joins 'Morning Joe' to talk about the bailout vote and says he'll 'let others be the judge' on his leadership.

"This may be and is the greatest financial crisis of our lives," McCain said. "And we have to act, and we have to act together in a bipartisan fashion. I'm committed to that. And I'm committed to doing whatever is necessary in a bipartisan fashion, and there'll be plenty of time to point the finger of blame."

The RNC released a television ad today tying Obama to the current financial crisis, even as McCain insisted that this is a time for restoring confidence, not name-calling.  

From NBC's Domenico Montanaro
A new RNC ad, "Worse," tries to pin the blame, at least in part, for the financial crisis on Obama. It also seems to villify the bailout, despite McCain's support for it. The ad stresses that Washington is "forced" to do the "bailout with OUR money. Can it get any worse?" an announcer says.

A McCain ad links Obama to Fannie/Freddie. "John McCain fought to rein in Fannie and Freddie," an announcer says. "The Post says: McCain 'pushed for stronger regulation'...'while Mr. Obama was notably silent.' But, Democrats blocked the reforms. Loans soared. Then, the bubble burst. And, taxpayers are on the hook for billions."

But complicating matters for the McCain campaign on this front, is that that campaign manager Rick Davis "was paid more than $30,000 a month for five years as president of an advocacy group set up by the mortgage giants Fannie Mae and Freddie Mac to defend them against stricter regulations," as the New York Times put it.

Also, there's an Obama ad running painting him as a centrist on health care in swing states Indiana, Wisconsin [Hat tip to Politico's Ben Smith] and by the sound of Elizabeth Edwards on an SEIU call today, in North Carolina as well.

From NBC's Domenico Montanaro
Look for an Obama ad tying Iraq waste to the economy and McCain. No word on where it's running.

"Well, the Iraqi government is finally spending some of its $79 billion surplus from oil," an announcer says. "A surplus that has grown with the record high oil prices we pay. Where's the money going? A Ferris wheel. It's true -- the Iraqi government is going to build a 650-foot Ferris wheel with air-conditioned cars, right in the heart of Baghdad. It's enough to make your head spin.

"John McCain wants America to keep spending $10 billion a month in Iraq when we should be rebuilding America. That's right. With banks failing because of Washington's lax oversight, gas prices soaring, and jobs moving overseas. John McCain will keep spending $10 billion a month in Iraq. 

"After years of Bush-McCain policies taking us for a ride, we just can't afford more of the same."

Politico's Ben Smith reported it's airing in at least Colorado and Virginia and that it's radio.

(If anyone hears it, let us know where!)

From NBC's Athena Jones and Chuck Todd
With the latest round of punditry blaming leaders from both sides of the aisle for failing to explain the mechanics of the Wall Street recovery plan and sell the proposal to the American people, some new wording from both candidates is worth noting.

"Because of the housing crisis, we are now in a very dangerous situation where financial institutions across this country are afraid to lend money," Obama is expected to say in Reno, NV, today.  "If all that meant was the failure of a few big banks on Wall Street, it would be one thing.  But that's not what it means.  What it means is that if we do not act, it will be harder for you to get a mortgage for your home or the loans you need to buy a car or send your children to college.  What it means is that businesses won't be able to get the loans they need to open new factories, or hire more workers, or make payroll for the workers they have.  What it means is that thousands of businesses could close.  Millions of jobs could be lost.  A long and painful recession could follow. "

And here's how McCain explained the crisis today in Des Moines, Iowa:

"Sonic Corporation, a drive-in restaurant chain based in Oklahoma, learned on Thursday that one of its lenders, GE Capital, had stopped extending new loans to the chain's franchisees. That will block plans to rebuild restaurants, add equipment and open new locations.  When small businesses like Sonic franchisees can't borrow, contractors don't get the remodeling work, equipment-makers lose sales, and restaurants go out of business.  It hurts the entire community."

Both candidates appear to be going full-speed ahead with making the financial meltdown relevant to everyday voters' lives. These new explanations are more direct, more explicit and do a better job of explaining the stakes than past remarks about the so-called "bailout" by either McCain or Obama.

From NBC's Carrie Dann
In an interview with NBC's Kelly O'Donnell today, McCain took a step back from blaming Obama for infusing politics into the bailout negotiations, and he previewed fellow "underdog" Palin's debate appearance later this week.

Asked if he still believes that Obama and his Democratic colleagues fueled a partisan atmosphere on the Hill as lawmakers struggled over the economic recovery bill, McCain responded that he wants to "put that aside now."

"I believe that politics has played too great a role in this. I think that Speaker Pelosi's speech was very unnecessary and inflammatory," he said, "But that's not a reason for us not to work together and come up with a solution. I think it's time now not to fix the blame but to fix the problem."

In light of much national anticipation of Thursday's vice presidential debate, as well as the recent rash of bad reviews for Palin's performance in media interviews, McCain defended his running mate's governing style and "tradition."

"The American people have taken to her in a way that I have never seen before,"  he said. "Their appreciation for her is not because she has got a Ph.D. from Harvard. She doesn't. Their appreciation for her is her world view, her tradition, her adherence to good government."

McCain described Palin's handicap in her upcoming debate against Senate colleague Biden as comparable to his own challenges in facing Obama.

"I think she'll be fine," she said. "I also think that she's just like me in my debates. Got my work cut out for me. I am debating one of the most articulate people ever to come on the American scene."

From NBC's Carrie Dann

An extended version of the latest Obama ad on the economy hits airwaves today.  The two-minute television spot, airing in "key states," hits McCain for relying on "the old trickle-down theory" and responds specifically to the claim that Obama's economic plan would raise - and not cut - taxes on the middle class. 

"My plan offers three times as much tax relief to the middle class as Senator McCain's," says the Illinois senator, who addresses the camera directly throughout. "If you make less than a quarter million a year, you won't see your taxes raised one penny under my plan."

The ad is very similar - and looks as though it may have been filmed at the same time - as the one minute spot  "A Stronger Economy" released by the campaign last Wednesday.

TEXT:  (BO) For eight years, we've been told that the way to a stronger economy was to give huge tax breaks to corporations and the wealthiest Americans, and somehow prosperity would trickle down.

Well now we know the truth.  

It didn't work. 

Instead of prosperity trickling down, pain has trickled up.

Working family incomes have fallen by two thousand dollars a year.

We're losing jobs. 

Deficits are exploding.

Our economy's in turmoil.

I know that that we can steer ourselves out of this crisis.

But not by driving down the very same path.

And that's what this election's all about.

On taxes, John McCain and I have very different ideas.

Instead of giving hundreds of billions in new tax breaks to big corporations and oil companies, I'll cut taxes for small and startup businesses that are the backbone of our economy.

Instead of more tax breaks for corporations that outsource American jobs, I'll give them to companies who create jobs here.

Instead of extending the Bush tax cuts for the wealthiest -- I'll focus on you.

My plan offers three times as much tax relief to the middle class as Senator McCain's.

If you make less than a quarter million a year, you won't see your taxes raised one penny under my plan.

And seniors making less than fifty thousand, who are struggling with the rising costs of food and drugs on fixed incomes, won't pay income taxes at all.

The tax code we have today is over 10,000 pages long.

Almost every bit of it was shaped by some lobbyist taking care of some special interest.

Well, it's time we had a President who puts you first.

I hope you'll log on to BarackObama.com and read my full plan.

I'm Barack Obama, and I approved this message because I know that with a new direction, and new policies focused on jobs and the middle class, we can lift our economy and our country.

From Chuck Todd, Mark Murray, Domenico Montanaro, and Carrie Dann
*** Who shouldn't be blamed: Just when you thought there couldn't be any more twists and turns in this election year, the House yesterday rejected the Bush Administration's $700 billion bailout package and the Dow plummeted. It's hard to find any blameless characters in this congressional bailout mess. But is it possible what Congress did yesterday was exactly what the voters wanted? The voters don't trust this current team in Washington -- or on Wall Street -- to do, well, anything.

Video: NBC's political director, Chuck Todd, offers his first read on the fallout for the presidential candidates following the failed financial bailout effort.

Here are some startling numbers from our last NBC/WSJ poll: 73% said we're on the wrong track; 65% disapprove of Bush's job; 73% disapprove of the job Congress is doing; and only 19% have "a lot" of confidence in the federal government, and that's higher than the confidence level the public has in corporate America (11%) or the financial industry (10%). So given all these polling figures, is it any wonder the public logged so many calls into Congress demanding their members vote against this bill? By the way, while many (including us) are talking about a crisis in leadership in Washington, it is worth noting that a powerful bipartisan coalition against the bailout has come from both the left and the right.
 
*** "Lord of the Flies" inside the GOP: So who runs the Republican Party? Apparently nobody. Perhaps the most startling political development was the amazing lack of leadership on the GOP side of the aisle. Let's run down the list of Republican leaders who attempted to persuade skeptical House Republicans: President Bush, John McCain, Dick Cheney, and John Boehner. (We'd add Newt Gingrich to this list, but no one is quite sure if his last-minute support was actually cover for his behind the scenes whipping against the bill.) Bush's leadership and trust issues within his party has been evidenced for quite some time, and the icing on the Bush legacy cake is that fact that he could only convince FOUR Texas House Republicans to support his bill. And then there's John McCain, who last week decided to insert himself into the process and then (before the bailout failed) took credit for getting wavering House Republicans on board. Perhaps he did get a few wayward House GOPers on board -- but it wasn't enough. Now McCain gets a double stomach punch: He's stuck being seen as supportive of this bailout (which isn't exactly popular with the conservative grassroots) and he gets to share in the blame for the defeat since he didn't have enough political capital to get this done (By the way, not a single member of the Arizona GOP delegation voted for this bill). Watching the McCain campaign deal with this yesterday, one could sense that they were fearful that they were going to look inept and take an even deeper political wound than they sustained last week.

*** Democrats can't escape blame: Pelosi missed a huge opportunity to become an historic speaker and instead invited comparisons to Tom DeLay by deciding to deliver a more partisan speech than necessary at the time. There would have been time for partisan politics AFTER the vote, but to do it before seemed like a strategic blunder.

Video: House Speaker Nancy Pelosi takes to the floor to announce "this legislation is not the end of the line," in the cleanup of the financial situation in the U.S. markets.

Pelosi played into the stereotype she had been very adept at avoiding most of these last two years. That said, did it really cost any GOP votes? Unlikely. But it did give the House GOP leadership a talking point to deflect from its own failure. Obama, who as McCain pointed out (probably jealously) kept a healthy distance from this process, didn't seem to try and exert any influence on some of the "no" votes from the progressive/liberal side of the Democratic caucus. A large chunk of those "no" voters were very early supporters of Obama during the primary. Would a true campaign by Obama to vote for this bill have persuaded another handful of Dems? Possibly. Then again, Democrats were never going to jump off this cliff by themselves. Still, what's another 12 votes at this point if this legislation is so necessary?
 
*** Profiles in political posturing: So while the "no" voters have tried to portray themselves as the courageous ones (and maybe they'll ultimately be proven right), it's interesting that some 90% of the members of Congress who are worried about the election hides -- either this November or in a GOP primary next cycle -- voted no. By our count, there appear to be, maybe, five potential profiles in courage (casting an unpopular vote with their constituents) with two members worth pointing out by name: Republican Jon Porter of Nevada, who is locked in an intense battle in Nevada's 3rd CD, and Democrat Jim Marshall, who never has an easy time at re-election in Georgia's 8th District.

Video: Top congressional and White House officials scramble to structure a new bailout proposal. NBC political director Chuck Todd reports.

Here are some other ways to slice and dice the "no" votes. Every Arizona House Republican voted against McCain's wishes; seven of the 11 Illinois House Democrats voted the way Obama wanted. Of the 24 retiring House Republicans who are not on the ballot for anything in November, 19 voted for the bailout, four voted against, and one didn't vote. Of the five statewide candidates still in the House, all but one voted AGAINST the bailout, including both Democratic Udalls and Republicans Pearce of New Mexico and Hulshof of Missouri. Only Maine's Tom Allen, who is a massive underdog to Susan Collins in Maine, voted "yes" of the state-widers.

*** A different kind of bailout: The press isn't getting any better for Palin… McCain tried to rescue her a bit yesterday by joining her for the final day of the Couric interview. The McCain campaign knows the pressure is on Palin to rescue the campaign again. Given the last 96 hours for Team McCain, Thursday can't come soon enough.

*** Hey, big spender: Late last week, we reported that the RNC's independent expenditure unit was going to launch a nearly $5 million advertising blitz in Wisconsin, Ohio, Michigan, Pennsylvania, Virginia, and even Indiana (a move that played a big role in us moving the Hoosier State from Lean McCain to Toss-up). Well, here's the ad, and it goes after Obama's proposed spending increases in the context of the $700 billion bailout. "Under Barack Obama's plan, the Government would spend a trillion dollars more, even after the bailout. A trillion dollars. Who pays? You do. New taxes. New spending. New debt. Barack Obama's plan? It will make the problem worse." (Of course, McCain's support for extending the Bush tax cuts has a steep price tag, too…) Between this ad and the new one by MoveOn, it's striking how both sides are trying to tie the bailout to the candidates. 
 
*** A Buckeye bonanza for Dems? Early voting begins today in the battleground of Ohio, as well as in Nebraska. Lost in the news of yesterday's bailout failure and the plummeting Dow was a court decision in Ohio that could have big implications in the presidential race. In a 4-3 decision, the Ohio Supreme Court upheld same-day voter registration and absentee ballot casting -- a ruling that could help Obama in the state. "The outcome of the court battles is likely to benefit Democrats in a state that narrowly awarded President Bush re-election in 2004," the AP writes. "Obama's campaign has organized car pools beginning Tuesday from college campuses to early voting sites. The Northeast Ohio Coalition for the Homeless is ferrying voters from homeless shelters to polling sites in the Cleveland area. Other organizations that seek to increase poor and minority participation in elections are transporting voters from low-income neighborhoods. The targeted voters have all traditionally had a harder time getting registered, and then getting to polling places on Election Day. Thanks to Monday's court decisions, these Democratic-leaning voters can do it all at once."

*** Still eyeing the Hawkeye State: While some polls show Obama will a double-digit lead in Iowa -- which makes it the likeliest red state to turn blue in November -- McCain today will make his second visit to the Hawkeye State in the past two weeks. He and Palin held a rally in the state on September 18. 

*** End of another era? Down the ballot in North Carolina, the Democratic hit that Elizabeth Dole spent just 20 days in the Tar Heel State in 2005 and 13 days there in 2006 might very well have been the final nail in her coffin in her race against Dem challenger Kay Hagan. Could the end of the Bush era also bring us the end of the Dole era? There has been a Dole in the Senate for nearly 50 straight years -- and either a Bush or a Dole on the national ticket going back to '72. Will Liddy Dole's potential defeat signal the true end of the two most powerful Republican families of the last 50 years?
 
*** On the trail: McCain holds a roundtable in Des Moines, IA. Obama attends a rally in Reno, NV.
 
Countdown to the vice presidential debate: 2 days
Countdown to the second presidential debate 7 days
Countdown to the third presidential debate: 15 days
Countdown to Election Day 2008: 35 days
Countdown to Inauguration Day 2009: 112 days
 
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The House yesterday rejected the Bush Administration's $700 billion bailout proposal -- "a stunning turn of events that sent the stock market into a tailspin and added to concerns that the U.S. faces a prolonged recession if the legislation isn't revived," the Wall Street Journal writes. "The 228-205 vote, which defied a full-court press from the president and the Treasury secretary, marked a dark moment in a month that has shaken the financial system to its core and forced the government to take a host of ad hoc measures to shore up confidence. Earlier Monday, U.S. authorities helped arrange the sale of Wachovia Corp. to Citigroup Inc., while the Federal Reserve joined other central banks in injecting more funds into credit markets."

The New York Times notes the lack of leadership on display yesterday. "From the White House to Congress to the presidential campaign trail, the principal players did not rally the votes they needed in the House. They appeared not to comprehend or address in a convincing way an intense strain of opposition to the deal among voters. They allowed partisan politics to flare at sensitive moments."

"If there was any doubt that President Bush had been left politically impotent by his travails over the last few years and his lame-duck status, it was erased on Monday when, despite his personal pleas, more than two-thirds of the Republicans in the House abandoned the plan."

In fact, check out this nugget, courtesy of the Washington Post: "Yesterday, Bush called nearly every member of Texas's Republican delegation, GOP aides said. He won over four of the 19."

Another New York Times piece points out that McCain was the person who perhaps had the most riding on bailout bill that collapsed yesterday. "Mr. McCain had announced last week that he was suspending his presidential campaign to work to ensure the legislation's passage, even at the risk of skipping the first presidential debate unless a deal was locked down. (He later relented, debating without a deal.) He had called for the high-level White House meeting that some participants later called unhelpful. And after some initial hesitation, he had allowed himself to be identified with a bill that he thought necessary even if unpopular."

"So when the deal fell apart on the House floor Monday, in no small measure because most of the chamber's Republicans balked at voting for it, the McCain campaign worked to contain the potential for damage. The first defense was to go on offense."

The AP's Babington adds, "The house always wins, gamblers are warned, and the U.S. House made John McCain pay Monday for his politically risky, high-profile involvement in a financial rescue plan that came crashing down, mainly at the hands of his fellow Republicans."

A bit after 6:00 am ET, Obama released a statement calling for Democrats and Republicans to come together to address the financial crisis and proposing one step to get greater support for the bailout measure: increasing the limit of FDIC insurance up to $250,000. "Thanks to measures put in place during the Great Depression, deposits of up to $100,000 are guaranteed by the federal government. While that 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. The current insurance limit of $100,000 was set 28 years ago and has not been adjusted for inflation.  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."

McCain was on Morning Joe, and said this about the bailout: "We didn't convince enough Republicans and Democrats that this was a rescue package and not a bailout package… We have to do a better job of the effect this is going to have on Main Street. The whole spectrum of Main Street economy is going to be jeopardized... I am going to come back ... come back again. This is a tough situation, one of the toughest I've ever seen -- if not the toughest… I am confident we can pass legislation because we have to do it." McCain also said he agreed with Obama's suggestion to raise FDIC limit to $250,000 from $100,000

The Washington Post: "Congressional leaders and the White House faced several options, none of them palatable just weeks before a heavily contested presidential election. Democratic leaders could choose to return with a measure guaranteed to win more Democratic votes, even at the expense of Republican support. Instead of simply purchasing distressed assets from financial institutions, some Democratic economists favor injecting lenders with cash in exchange for stock, letting the institutions figure out what to do with the mortgage-backed securities and other troubled assets weighing down their books."

More: "Republicans were advocating slight changes to the bill that could attract a handful of new votes. Party members might be enticed by a measure that would allow businesses to write off more past losses on this year's taxes or a more robust expansion of mortgage insurance, financed by banks. Democrats could add more assistance to ailing state and local governments without raising too many GOP objections."

Can the Senate come to the rescue? Politico: "The collapse of Treasury's financial rescue plan in the House sent Wall Street into a tailspin Monday and left congressional leaders looking for ways to recover — possibly by starting anew in the safer Senate. Senate Republicans are more supportive of Treasury Secretary Henry Paulson and the massive $700 billion government intervention than are their House counterparts. And leading House Democrats believe that a strong Senate vote — coupled with turmoil in financial markets — will create enough pressure for the House to relent."

An instant Washington Post/ABC poll conducted yesterday found that 45% supported the bailout measure and 47% opposed it. But nearly nine in 10 "expressed concern that the failure of the bill could lead to a more severe economic decline." More: "Asked to assess responsibility for the legislation's failure, 44 percent said Republicans were the reason, 21 percent said the Democrats and 17 percent said both sides were responsible."

The New York Times' Nagourney looks at the stakes for Palin in Thursday's debate. "The amount of time and staff power being devoted to [her debate prep] was evidence of concern among Mr. McCain's associates that Ms. Palin's early triumphs — a well-received convention speech, her drawing of big crowds — has been overtaken by a series of setbacks, creating higher stakes for her in the debate Thursday… '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," David Frum, a former speechwriter for President Bush who is now a conservative columnist, said in an interview. "If she doesn't perform well, then people see it.'"

Meanwhile, the Washington Post writes a piece noting Biden's penchant for making gaffes. "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."

Politico's Roger Simon reports that Biden will most likely go easy on Palin. "If Sarah Palin goofs, flounders, stumbles or blunders during her debate against Joe Biden on Thursday night, Biden is going to let it slide. 'If she makes a gaffe, he underplays it,' one of the people prepping Biden for his vice presidential debate told me. 'At most, he says, "I am not sure what Gov. Palin meant there."'"

"Second, Biden knows the press is going to pounce on any mistakes, and so he does not need to. Third, and most important, Sarah Palin is not Biden's true target.  'Joe Biden's No. 1 job during the vice presidential debate is to keep the focus on the top of the ticket,' the Biden debate prepper told me. 'He is going to keep the focus on John McCain.'"

The Washington Post's Ruth Marcus dreams of having McCain debate -- drum roll, please -- Sarah Palin. "I can understand how he views Obama as untested and unprepared. I can't square that dismissive attitude with McCain's selection of Palin."

The Wall Street Journal focuses on McCain's crusade against earmarks. "But earmarks represent only a tiny portion of federal spending, and experts say the Arizona Republican has vastly overstated the savings available even if every earmark were eliminated. "They're a rounding error in the budget," said Robert Bixby of the Concord Coalition, which advocates for balanced federal budgets. Nor is it clear that voters are anywhere near as upset about earmarking as is Sen. McCain, who prides himself on never having requested such spending for his state. But the issue does resonate, analysts say, when it is connected with larger failures of Washington."

The New York Times fact-checker is the latest to take issue with McCain's claim that Obama voted to raise taxes on those making as little as $42,000. "The basis of Mr. McCain's accusation is that Mr. Obama has voted twice this year for Democratic-supported resolutions on the budget for the 2009 fiscal year, which begins Wednesday. In those nonbinding resolutions, Mr. Obama and others, including two Republicans, voted to allow the tax cuts that President Bush pushed through Congress in 2001 and 2003 to expire at the end of 2010, as envisioned in the original legislation. The budget resolutions are merely a blueprint and do not have the force of law."

More: "In his presidential platform, Mr. Obama has also proposed several measures to mitigate the impact of letting the Bush tax cuts expire. Under his plan, only individuals making $200,000 or more and families earning more than $250,000 a year, accounting for less than 2 percent of the population, would pay additional taxes, and more than 90 percent of the population would receive a tax break of some sort."

Yesterday, the RNC pounced on Obama for saying "we've got the long-term fundamentals that will really make sure this economy grows" – after Obama and the Democrats ridiculed McCain for saying that the fundamentals for our economy are strong.

The Obama camp, however, notes that Obama was talking about his economic plan, not the condition of the US economy. Here's the full context, per the campaign: "I have said it before and I'll say it again:  we need to pass, after this immediate crisis is over, an economic stimulus plan. Right now. For working families – a plan that will help folks cope with rising food and gas prices, that can save one million jobs by rebuilding our schools and our roads, and help states and cities avoid budget cuts and tax increases. A plan that would extend expiring unemployment benefits. For those Americans who have lost their jobs and have been working hard to find a new one, but haven't found one yet. That's part of the change we need."

And here comes the line: "And then after this immediate problem, we've got the long-term fundamentals that will really make sure this economy grows. Change means a tax code that doesn't reward the lobbyists who wrote it, but the American workers and small businesses that deserve it. As President I am going to eliminate capital gains taxes for small businesses and start-ups. That's how we'll grow our economy and create the high-wage, high-tech jobs of tomorrow. I will cut taxes – cut taxes – but not the way John McCain does things. I'll cut taxes for 95% of all working families."

"Palin said Monday that her comment about attacking terrorist targets in Pakistan, which appeared to contradict the position of GOP presidential nominee John McCain, was a response to a 'gotcha' question from a voter… McCain, who sat with Palin, said in Monday's interview that he understands "the day and age of 'gotcha' journalism… In a conversation with someone who you didn't hear the question very well, you don't know the context of the conversation. Grab a phrase. Gov. Palin and I agree that you don't announce that you're going to attack another country." Though Palin heard the question clearly."
 
"Asked what she learned from the experience, Palin said: 'That this is all about 'gotcha' journalism. A lot of it is. But that's OK, too.'" 
 
And the AP asks: "Has Sarah Palin become a liability for John McCain? 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 New York Daily News on Palin's latest interview with CBS: "In runup to debate, Sarah Palin turns up anger."

COLORADO: "Statewide, nearly 215,000 people between Jan. 1 and Sept. 1 registered as a new voter or because they moved to a different county, according to Magellan Data and Mapping Strategies in Louisville. That's 26,000 more than in the same period in 2004. Of those newly registered voters, 78,013 are Democrats, compared with 48,451 Republicans. New unaffiliated voters outnumber both major parties, with 85,795 registrations during that eight-month period, according to the political consulting firm. More than 40 percent of new voters are opting for mail ballots."

FLORIDA: Good early-voting news for Republicans eying Florida. "Looks like the Republicans are out hustling Florida Democrats again on absentee ballots. According to Democratic figures, Republicans have requested more than 637,000 absentee ballots so far, compared to more than 441,000 for Democrats, and 185,000 for independents."

OHIO: The Ohio Supreme Court ruled yesterday that newly registered voters can cast an absentee ballot without waiting thirty days, good news for Democrats hoping to boost new voter turnout before Election Day. More from the ruling: "Observers will be allowed in places where people can register to vote and then cast their absentee ballots, all in the same day."

VIRGINIA: The Richmond Times-Dispatch reports that "Voters younger than 34 accounted for 62.4 percent of the 284,153 new voter registrations in Virginia between Jan. 1 and Sept. 15."

From NBC/NJ's Athena Jones

In Denver, Obama did not respond to a reporter's shouted question about how urgent he believes the situation in Washington is. (A campaign aide had already said earlier that he was not going to have a press conference on the matter.)

McCain did not respond to inquiries from reporters as he boarded his plane in Columbus, Ohio earlier today, nor did he take questions after making a brief statement in Des Moines on the failure of the bailout bill.

From NBC/NJ's Mike Memoli

WILMINGTON, Del. -- As Biden actively prepares for Thursday's vice presidential debate in St. Louis, the imminent deployment to Iraq of his eldest son, Beau, is also weighing on his mind this week.

Beau Biden, who joined the Delaware National Guard in 2003, is being called to active duty with the 261st Signal Brigade on Friday. It's the first time the unit is being sent to Iraq. Lt. Col. Len Grattieri, public affairs officer for the state National Guard, confirmed that the Delaware senator will speak at the deployment ceremony in Dover.

"He usually addresses every unit that we deploy," Grattieri said. "What he usually talks about is the current situation in Iraq or Afghanistan, depending on where the unit is going, and wishes them good luck in their deployment."

Biden is expected to return to Delaware immediately after Thursday's debate. As was the case when Gov. Sarah Palin spoke at her son's deployment, there is sensitivity about his presence, given Biden's status as the vice presidential nominee. But Grattieri said he does not expect any changes to the format of Friday's event.

"It's certainly not a political rally. It's to support the troops," he said.

Typically Biden, as the longest-serving member of the Delaware congressional delegation, would speak third in the program, following Gov. Ruth Ann Minner and the National Guard adjutant general.

Beau Biden, who is also Delaware's attorney general, would be expected to serve the 12 month deployment. In the event that Biden becomes vice president, Grattieri said that the Army would make decisions about whether to recall his son for security considerations.

The campaign has been reluctant to discuss any details of Beau's deployment. Biden press secretary David Wade did say, however, that family time is "very important this week."

Biden has spent most of today at the Sheraton Hotel in downtown Wilmington, where the campaign has set up a mock debate stage. Gov. Jennifer Granholm is playing the part of Palin.

From NBC's Domenico Montanaro
The Dow finished down 777.68 points, or almost 7%. It is the largest one-day drop in points in the history of Wall St. In 1987, on Black Monday, the market dropped 20%.

Video: CNBC's Michelle Caruso-Cabrera discusses the DOW's freefall following the collapse of the Wall Street bailout and what effects it will have on world markets. 'There's no credit available.... It stops business in its tracks,' says Cabrera.

From NBC's Domenico Montanaro
Here's the Obama-Biden statement on the failed bailout bill:

"This is a moment of national crisis, and today's inaction in Congress as well as the angry and hyper-partisan statement released by the McCain campaign are exactly why the American people are disgusted with Washington. Now is the time for Democrats and Republicans to join together and act in a way that prevents an economic catastrophe. Every American should be outraged that an era of greed and irresponsibility on Wall Street and Washington has led us to this point, but now that we are here, the stability of our entire economy depends on us taking immediate action to ease this crisis," said Obama-Biden campaign spokesman Bill Burton.

From NBC's Domenico Montanaro
Lost in the big news of the bailout failure and the subsequent plunging Dow, is a court decision in Ohio which could have big implications for the presidential race.

Republican-backed lawsuits went to the Ohio Supreme Court, and the court, by a 4-3 vote, "upheld a weeklong period in which new voters can register and cast an absentee ballot on the same day in Ohio. Another federal court decision was expected later in the day over the early voting window...." (The Ohio Supreme Court has six Republicans and one Democrat.)

Previously, voters had to be "registered for at least 30 days before receiving an absentee ballot."

This is the first presidential election in Ohio in which voters can vote absentee and early without excuse. Election officials have pushed the effort as a way to eliminate long lines and voting complications of years past. In 2004, Democrats alleged voter disenfranchisement in areas with large African-American populations, as voters waited hours and hours to vote.

For more on early voting and potential complications, click here.