Washington
25 September 2008
Lawmakers in the U.S. House of Representatives have voiced concern to
Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben
Bernanke about proposed steps to bailout U.S. financial institutions.
VOA's Dan Robinson reports from Capitol Hill.
As they did
before a Senate committee on Tuesday, Paulson and Bernanke urged
members of the House to swiftly enact legislation for a rescue plan
that would cost American taxpayers an estimated $700 billion.
Treasury
Secretary Paulson told the House Financial Services Committee that
decisive action is needed and warned of the danger of delay.
"We must do so in order to avoid a continuing series of financial institution failures and frozen credit markets that threaten American families' financial well-being, the viability of businesses - both small and large - and the very health of our economy."
Federal Reserve
Chairman Ben Bernanke told the committee the U.S. economy would suffer
a major setback, if the rescue plan is not implemented. "If financial
conditions fail to improve for a protracted period, the implications
for the broader economy could be quite adverse," he said.
Lawmakers
continue to work on revisions to the White House proposal to produce a
bipartisan bill that would allow the government to buy de-valued assets
from troubled financial firms and banks.
Democrats and
Republicans have pressed Paulson and Bernanke for specifics about how
such purchases would occur, and how the worth of the assets would be
assessed, insisting on more oversight and taxpayer protections.
Saying
he is not looking for "extraordinary power," Paulson maintained that
the $700 billion eventually would be repaid to the government.
"This
is not expenditure in a traditional sense. It is not an outlay. It is
purchasing assets. And we believe when those assets are sold, the
money comes back to the government, to the taxpayer."
Lawmakers
from both major parties want substantial changes to the proposed
bailout. The Bush administration agreed to one of those changes on
Wednesday.
Citing public anger about high corporate salaries,
Paulson said he agreed on the need to limit pay for Wall Street
executives whose companies could benefit from the government rescue, as
long as it would not impede the effectiveness of the program.
California
Democratic Representative Brad Sherman called for the creation of a
powerful board to co-approve Treasury Department asset purchases. "What
we need is a co-signer, somebody sitting there saying you can or cannot
engage in that transaction," he said.
Democratic and Republican lawmakers cited their constituents' fears about the bailout plan.
"One
thing we as politicians know, you can't make a move this large without
the consent of the American people. And we don't have it yet." said
Republican Representative Deborah Pryce of Ohio.
Meanwhile, the financial crisis continues to be at the center of the U.S. presidential race.
Republican
candidate Senator John McCain suspended his campaign on Wednesday and
called for postponement of the first presidential debate with his
Democratic opponent Senator Barack Obama on Friday. McCain said he
will return to Washington on Thursday to work on a solution to the
financial crisis.
Obama rejected McCain's proposal, but said
both candidates are working on a joint statement calling on their
parties in Congress to come together to find a solution to the nation's
economic turmoil.