Democrats Begin to Set Own Bailout Terms



This article was reported by David M. Herszenhorn, Stephen Labaton and Mark Landler, and written by Mr. Labaton.

WASHINGTON — Congressional Democrats began to set their own terms on Sunday for a plan to rescue the nation’s financial institutions, including greater legislative oversight of the Treasury Department, more direct assistance for homeowners and limits on the pay of top executives whose firms seek help.

The Democrats’ demands came as Treasury Secretary Henry M. Paulson Jr. blanketed the Sunday talk shows to promote the Bush administration’s $700 billion bailout package, emphasizing that it was needed not just for Wall Street, but for all Americans. He urged Congress to approve a “clean” rescue plan without tacking on extra programs.

“I hate the fact that we have to do it, but it’s better than the alternative,” Mr. Paulson said on “Fox News Sunday.”

The Bush administration proposal could be the largest government bailout of private industry in the nation’s history, and it calls for nearly unfettered powers to the Treasury secretary. There is intense pressure to pass a rescue measure quickly because the markets remain jittery.

Still, competing interests were already complicating the negotiations, as Democrats pushed for assistance for distressed homeowners and for oversight authority of the bailout program. Some lawmakers also said they did not want to be rushed into approving extraordinary new powers for the Treasury secretary and the government without full consideration of the consequences.

Both presidential nominees, who face the prospect of inheriting an enormous new government program, said there had to be more oversight of the Treasury Department than the Bush administration had proposed.

Financial companies were already lobbying intensely to broaden the plan. And the Bush administration did indeed widen the scope by allowing the government to buy out assets other than mortgage-related securities.

Banks and traders also braced themselves for another tumultuous week in the markets. Still, early signs indicate that investors in Asia were reacting positively to the developments in Washington. Shares in Asia jumped in early trading on Monday morning, as investors took their cues from a rally on Wall Street on Friday. The Nikkei 225 index climbed 2.55 percent in early trading in Tokyo, and the Kospi index increased 2.1 percent in Seoul, South Korea.

Top Democrats and Republicans on Capitol Hill said they would act swiftly on the administration’s request, but not without setting their own conditions.

“Congress will respond to the financial markets crisis by taking action this week in a bipartisan manner that will protect the taxpayers’ interests,” House Speaker Nancy Pelosi said. She added that the administration’s proposal did “not include the necessary safeguards. Democrats believe a responsible solution should include independent oversight, protections for homeowners and constraints on excessive executive compensation.”

“We will not simply hand over a $700 billion blank check to Wall Street and hope for a better outcome,” she said.

Congressional Republicans, too, put the Bush administration on notice that they would not simply rubber-stamp the bailout proposal but would insist on a number of changes, including specific protections for taxpayers. Those would include a requirement that any profits from the program be returned to the Treasury and not be used for any other purpose.

Aides to senior House Republicans said that lawmakers would also insist on greater oversight of the program and were proposing a joint select committee, consisting of lawmakers of both parties and from both chambers of Congress.

Top administration officials and senior lawmakers said that the markets could be devastated if Congress and the administration failed to reach agreement on the plan. But significant disagreements began to emerge on Sunday about the contours of such a bailout.

On Sunday, Mr. Paulson defended the plan and the administration’s decision to expand it to protect foreign companies and authorize even wider latitude to buy assets other than those that were backed by mortgages.

Mr. Paulson, a former Wall Street deal maker, also suggested that the administration would have some flexibility in dealing with concerns raised by Congress.

Democrats said the plan would need to provide more specific relief for troubled homeowners. They said the program, which the administration proposed to be run by Treasury, would have to be more accountable to Congress. And they said that the plan must restrict the compensation of corporate executives from companies that make use of the program to sell the burdensome securities on their balance sheets to the United States.

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Democrats better get in their ass...or we are gonna get in both their asses. Step up or orderly step the fuck out.

Whenever Ds say they are not going to give Bush a 'blank check' for something, there is, indeed, very real cause for concern that they will do exactly that.

I don't know what we can do to prevent Congress from continuing its spineless ways. However, I wish I did know what we could do.

And we are trying to be civil out here. Just take your money and go the fuck away and let grown folks handle this shit... Cause we have a solution.

#1 STOP THE DERIVATIVES MARKET, IMMEDIATELY.

#2 LET THESE PERDATORY CORPORATIONS DIE. NO BAIL OUTS!

#3 Immediately begin planning assessing the monetary system for changes.

Stop the Federal Reserve - Fire them all! They are crooks! The USA needs to print their own money and stop borrowing.

Immediately, set up a REAL revenue service...a bonified federal dept which will collect taxes, invest and set up a rescue plan for mortgage holders.

Immediately, advise each state to permit opening LOCAL credit unions for businesses and personal checking.

I wonder how these conservatives feel about good ol Dubya now... Oh wait its not him, its those god damn liberals again. As always spin it your way Rush. Spin it!