Democrats vow to refine rescue plan
Congressional leaders expressed concern Saturday about the Bush administration’s request to spend as much as $700 billion buying up bad debt, promising to work quickly to pass legislation but vowing to add measures that protect lower-income Americans from economic risk.
“It’s clear that the administration has requested that Congress authorize, in very short order, sweeping and unprecedented powers for the Treasury secretary to confront a financial crisis of historic proportions,” said House Speaker Nancy Pelosi, California Democrat, in a statement e-mailed to reporters late in the day.
Mrs. Pelosi promised that Democrats would “strengthen the proposal by ensuring that the government is accountable to the taxpayers in any future actions under this broad grant of authority, implementing strong oversight mechanisms and establishing fast-track authority for the Congress to act on responsible regulatory reform.”
House Majority Leader Steny H. Hoyer, Maryland Democrat, cited the “need to act prudently” and said House Democrats would “make changes necessary to provide accountability, help working Americans and protect the taxpayer’s interest.” Sen. Charles E. Schumer, New York Democrat and chairman of Congress’ Joint Economic Committee, agreed, saying that while the Bush administration’s bailout plan was a “good foundation of a plan that can stabilize markets quickly, it includes no visible protection for taxpayers or homeowners.”
“We look forward to talking to Treasury to see what, if anything, they have in mind in these two areas,” he said.
Even Republicans aligned with the president spent the day poring over the implications of granting the Treasury secretary extraordinary powers to snatch up devalued mortgage-backed securities to prevent them from dragging down the entire economy.
“We must closely scrutinize the proposal to make sure it works, and we must do so quickly,” said Senate Minority Leader Mitch McConnell, Kentucky Republican, although he cautioned the Democrats against adding additional provisions to the plan, particularly if done for partisan advantage or with an eye on the November elections.
“Simply put, now is not the time for partisan plans or pet projects,” Mr. McConnell said.
The president, meanwhile, defended the plan in a rare weekend press conference and said he was confident Capitol Hill would move quickly to approve it.
Though the administration had hoped for an agreement on some details by Sunday, in order to reassure global markets, the mood on Capitol Hill was doubtful that consensus would be reached that quickly.
Yet the president said that in his conversations Friday with congressional leaders, he “found a common understanding of how severe the problem is and how it is necessary to get something done quickly, and I think we will.”
The Treasury Department formally submitted its simply worded but sweeping plan to Congress on Saturday morning and then briefed staffers from key congressional committees around midday.
The 850-word proposal would allow the Treasury secretary to buy up as much as $700 billion of “mortgage-related assets from any financial institution having its headquarters in the United States.”
The plan would raise the U.S. debt ceiling from $10.6 trillion to $11.3 trillion and would require the secretary only to make semiannual reports to Congress over the next two years, after which most of the powers under the special law would expire.