Morning Brief: Angry Congress works over bailout plan

Top Story Alex Wong/Getty Images Fangs bared, the U.S. Congress has begun to sink its teeth into the Bush administration’s $700 billion proposal to buy up illiquid assets from struggling financial institutions. But if President George W. Bush truly hoped for a clean, quick bill, his hopes were dashed yesterday as grumpy lawmakers wrangled with ...

592443_080923_Dodd5.jpg
592443_080923_Dodd5.jpg

Top Story

Alex Wong/Getty Images

Fangs bared, the U.S. Congress has begun to sink its teeth into the Bush administration's $700 billion proposal to buy up illiquid assets from struggling financial institutions.

Top Story

Alex Wong/Getty Images

Fangs bared, the U.S. Congress has begun to sink its teeth into the Bush administration’s $700 billion proposal to buy up illiquid assets from struggling financial institutions.

But if President George W. Bush truly hoped for a clean, quick bill, his hopes were dashed yesterday as grumpy lawmakers wrangled with Treasury Department officials over proposals to beef up oversight, provide direct assistance to homeowners, give the government an equity stake in companies that take bailout funds, and limit executives’ pay.

The skepticism, at least, was bipartisan. Democrat Chris Dodd, the Senate Banking Committee chairman, introduced a bill of his own for discussion, while Republicans expressed concerns about the size of the final tab. “It would be foolish to waste massive sums of taxpayer funds testing an idea that has been hastily crafted,” stressed Sen. Richard Shelby, the ranking GOP member on the committee.

Outside Congress, Treasury’s plan fared little better. “This administration is asking for a $700 billion blank check to be put in the hands of Henry Paulson, a guy who totally missed this, and has been wrong about almost everything,” said liberal economist Dean Baker in a representative comment. “I think it’s awful,” grumbled Allen Meltzer of Carnegie Mellon University.

The OECD, however, said it welcomed the bailout, and European governments expressed support, albeit not a willingness to participate.

Equity markets, meanwhile, appeared to react negatively to the uncertainty surrounding the bailout. Shares fell on Wall Street Monday, and European and Asian markets continued a downward trend in trading Tuesday. Oil prices spiked Monday but have fallen again.

Decision ’08

Is al Qaeda plotting an October surprise?

Sarah Palin is doing more rallies, fewer fundraisers.

Conservative columnist George Will comes perilously close to endorsing Barack Obama.

The candidates continue to spar over the economy.

Americas

So-called white flight has reversed in New York, new data shows.

Colombia says it has seized another FARC computer, yielding new intelligence.

Russian naval vessels have set sail for Venezuela.

Asia

The Bush administration is conducting four major reviews of its Afghanistan policy. The United States, Afghanistan, and Pakistan are considering creating a joint military force for the border areas, according to the Afghan defense minister.

A top Afghan diplomat was kidnapped in Pakistan Monday, and the Taliban kidnapped more than 150 construction workers in Afghanistan.

North Korea asked the IAEA to unseal its nuclear reactor.

Middle East and Africa

A Palestinian man slammed his car into a crowd of Israeli soldiers, injuring 15.

Sunni “citizen patrols” are causing increasing problems in Iraq. The good news? Shell is opening an office in Baghdad after a 36-year absence.

A mortar attack on a Mogadishu market killed as many as 30 people.

Europe

Georgia says it shot down a Russian drone flying over its territory.

Russia is in the midst of its own financial shakeout.

A key European economic index contracted for the fourth straight month.

Today’s Agenda

Gordon Brown gives “the most important speech of his life” at the Labor Party conference. The financial crisis could end up saving the unpopular British prime minister from an internal party challenge.

U.S. Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke testify before the Senate Banking Committee.

President Bush gives his final annual address to the U.N. General Assembly and meets with Asif Ali Zardari, the new Pakistani president.

T-Mobile unveils the first phone to use Android, Google’s mobile phone software.

Venezuelan President Hugo Chávez is visiting China.

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