Who's going to get in line for bailout?
Treasury Secretary Henry Paulson during the news conference announcing a federal takeover of Fannie Mae and Freddie Mac.
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KAI RYSSDAL: Figuring out what to pay is just one piece of this puzzle. There's another important question in play right now in Washington. What, exactly, is Secretary Paulson going to buy with that $700 billion? Originally the plan was to buy bad mortgage debt from banks. But Marketplace's Steve Henn reports there's a push on to spread the wealth.
STEVE HENN: If you are a banker with a bunch of bad debt on your books, you might just be hoping this bailout morphs into a get-out-of-jail-free card.
Dennis Moroney follows consumer credit card debt at the Tower Group.
DENNIS MORONEY: As the economy has been struggling, delinquencies have, indeed, increased.
That, coupled with a proposed change forcing companies to reveal more debt on their books, could leave big banks with another fat problem.
Credit card debt's has been bundled and sold off to financial institutions just like mortgages. Student loans and auto loans were sliced, diced and sold, too. Which means banks could have billions more in toxic securities they'd love to unload.
Scott Talbott is the lead lobbyist for the Financial Services Roundtable. He says Paulson should be allowed to use the bailout to buy any or all of this stuff.
SCOTT TALBOTT: Take them off the books of the troubled financial institution. And allow that institution to then re-enter the markets with cash to make more loans to other consumers to help jump-start the economy.
But Talbot says the companies his group represents, like Bank of America and GMAC, know there are political limits. He thinks it's unlikely Congress will OK massive purchases of credit card debt and he says some unregulated financial players are likely to be cut out altogether.
TALBOT: I think hedge funds would be probably a bridge too far.
As one lobbyist said, when it comes to larding up this bill with goodies, you don't want to push it. Pigs in Washington get fat. Hogs get slaughtered.
In Washington, I'm Steve Henn for Marketplace.