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Bernanke, Paulson head to Congress

President George W. Bush walks alongside Chairman of the Federal Reserve Ben Bernanke (left) and SEC Chairman Christopher Cox (2nd right) and Treasury Secretary Henry Paulson (right) before speaking about the economy on Sept. 19, 2008.

TEXT OF STORY

Stacey Vanek-Smith: News that the federal government was crafting a $700 billion bailout plan for financial markets had stock markets all over the world singing on Friday. But the bloom came off that rose pretty fast. Big questions have come up about the plan and the markets have turned south again.

That's putting a lot of pressure on capital hill to get it right. Later today, Treasury Secretary Henry Paulson and Federal Reserve chief Ben Bernanke will go before lawmakers to answer questions about the bailout plan. Marketplace's Steve Henn has more.


Steve Henn: The administration proposal puts the Treasury Secretary completely in charge of the biggest bailout in U.S. history. The administration bill exempts the Secretary from lawsuits and places few limits on the kind of mortgage-related assets the government can buy. Congress is pushing back. Christopher Dodd, chairman of the Sen. Banking committee, wants limits on executive compensation and more protections for taxpayers. Others would go further.

Christopher Dodd If we are going to authorize $700 billion to buy bad assets, there has to be something from industry.

Congressman Brad Miller serves on the House Financial Services Committee. He'd like to see bankruptcy judges empowered to rewrite mortgages to help homeowners avoid foreclosure. The banking industry fought that idea aggressively. But ...

Brad Miller: They're drowning, they are drowning entirely as a result of their own conduct, and now they are making demands about what kind of rope we are going to throw them.

But even Miller agrees they'll be rescued by the end of the week.

In Washington, I'm Steve Henn for Marketplace.

About the author

Steve Henn was Marketplace’s technology and innovation reporter for the entire portfolio of Marketplace programs until December 2011.
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Well let’s see…if we give the Treasury, which is an arm of the Presidency, a blank check this means they can spend any amount they want….I thought Congress was to responsible for deciding appropriations…Is Congress giving away their responsiblity and if so wouldn’t this require a change in our Constitution…Wouldn’t this change the USA from a representative demoncracy to dictatorship or what? Are there any constitional lawyers out there????

Are we the taxpayers going to own the homes, or are we just buying the paper, like Lehman Brothers or countless other ill-advised, and frankly- ignorant- economic "experts". They can't claim they were not aware, because Greenspan told them. And if little me heard it, they surely did too. I would like the US Attorneys to go after the slicks who devised and approved the NINJA loans (no income! no job! no assets?!!), and the bank examiners who did not examine. I was hoping that George Bush's horrific administering of this country would have just quietly faded away, but NO . . .

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