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 ...
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.
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