Paulson to Congress: Pass bailout ASAP
Treasury Secretary Henry Paulson, Federal Reserve Board Chairman Ben Bernanke, Chairman of the Securities and Exchange Commission Christopher Cox, and director of the Federal Housing Finance Agency James Lockhart III, testify during a hearing before the Senate Banking, Housing and Urban Affairs Committee today.
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Stacey Vanek-Smith: Treasury Secretary Henry Paulson and Federal Reserve chief Ben Bernanke are on capital hill this morning. They're answering questions about the $700 billion plan to bail out financial markets. But so far, lawmakers don't seem to be convinced. Senate Banking Committee Chairman Christopher Dodd said the money seems to be going to the wrong people.
Christopher Dodd: It would do nothing in my view to help a single family save a home, at least not up front. It would do nothing to stop even a single CEO from dumping billions of dollars of toxic assets on the backs of American taxpayers. But at the same time, do nothing to stop the very authors of this calamity to walk away with bonuses and golden parachutes worth millions of dollars.
But Treasury Secretary Henry Paulson had one message for lawmakers: Get moving already. Paulson said government regulation and other parts of the plan will need further debate, but that lawmakers need to put differences aside and pass the bill ASAP.
Henry Paulson: We must have that critical debate, but we must get through this period first. Right now, all of us are focused on the immediate need to stabilize our financial system. And I believe we share the conviction that this is in the best interests of all Americans. Now let's work together to get it done.
The plan would create a government entity that would buy up hundreds of billions of dollars worth of bad mortgages. Could be hard to rush this plan. Seven hundred billion dollars is a lot of money, after all. And this being Washington, everybody has a pet stipulation. Marketplace's Steve Henn reports.
Steve Henn: In their own bills, lawmakers have pushed to limit CEO compensation, change bankruptcy laws to help homeowners and give tax payers an equity stake in the companies they help. All these provisions make Wall Street bankers a bit uneasy, but Congress has also taken some steps they like. Scott Talbott's a lobbyist for the Financial Services Roundtable.
Scott Talbott: Who can participate and what assets are eligible for purchase by treasury are the heart of the matter and they are still a little bit in flux.
He says one version of the bailout bill allows the feds to buy any troubled assets from banks, not just mortgage loans.
Talbott: Are auto loans included? Are student loans included? Are credit card loans included
Henn: I mean troubled assets seems pretty broad.
Talbott: It is; it is.
Henn: But it's not a done deal.
Talbott: So there is still some uncertainty.
And Talbott and financial markets around the world are listening closely as Bernanke and Paulson and Congress hash out the details and try to end the uncertainty.
In Washington, I'm Steve henn for Marketplace.