Sen. Richard C. Shelby of Alabama, the ranking Republican on the Senate Committee on Banking, Housing and Urban Affairs, said he was open to at least some changes in the Paulson plan, while warning that the ultimate price tag to taxpayers could far exceed the current estimates of $700 billion.
Sen. Jon Kyl, Arizona Republican, said Congress could look at such issues as multimillion-dollar executive pay packages and homeowner relief after its passes the plan to address the immediate crisis.
“Let’s put out the fire, and then we can go deal with our favorite solutions to all of these problems,” he said on “Fox News Sunday.”
Democrats also are feeling pressure from liberal economists and think tanks that argue the Paulson plan gives the administration far too much power and is tilted heavily toward helping Wall Street while doing little for Main Street.
Brookings Institution economics fellow Doug Elmendorf floated a plan in which the government would make an industrywide equity investment in all types of financial firms. He argues that it would provide an instant jolt of money to get banks lending again, would not reward lenders who made the riskiest loans and, unlike the Treasury proposal, would give taxpayers a cut of the profits if the banks’ stock value improves.
Robert B. Reich, labor secretary under President Clinton and now a professor at the University of California at Berkeley, said any federal bailout funds should come with strings, including sharp restrictions on executive compensation and a ban on most lobbying and campaign donations from industries related to Wall Street.
“Wall Streeters may not like these conditions,” Mr. Reich said on his Web site (http://robertreich.blogspot.com). “Well, you should tell them that the public doesn’t like the idea of bailing out Wall Street.”
But both parties in the next few days will be trying to gauge how hard they can push before compromising, with both sides, for now, seconding Mr. Paulson’s argument that failing to act - and act soon - would be disastrous.
“Nobody knows exactly what they should do, but anything is better than nothing,” New York Mayor Michael R. Bloomberg said on NBC’s “Meet the Press.”
Raised in Northern Virginia, David R. Sands received an undergraduate degree from the University of Virginia and a master’s degree from the Fletcher School of Law and Diplomacy at Tufts University. He worked as a reporter for several Washington-area business publications before joining The Washington Times.
At The Times, Mr. Sands has covered numerous beats, including international trade, banking, politics ...
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