- The Washington Times - Wednesday, September 24, 2008

UPDATED:

A day after a five-hour grilling by unhappy lawmakers over the proposed $700 billion Wall Street rescue plan, Federal Reserve Chairman Ben S. Bernanke and Treasury Secretary Henry M. Paulson Jr. are feeling the heat again as the Bush administration resumed its sales pitch for congressional approval.

With President Bush announcing plans to deliver his own, nationally-televised speech in support of the plan Wednesday evening, Mr. Bernanke and Treasury Secretary Henry Paulson were back on Capitol Hill, a day after receiving a rude reception on the first day of public lobbying for the bailout.

Raising the stakes, the White House announced that President Bush would give a rare nationwide address Wednesday evening to defend the Wall Street rescue package and urge quick congressional passage.


“I think everyone will tune in tonight because we are facing a once-in-a-century crisis in our financial markets,” said White House press secretary Dana Perino.

Related Stories: Bernanke: Fed will “act as needed”

Bernanke warns of disaster if no bailout

Mr. Bernanke went first today, appearing before the congressional Joint Economic Committee. He and Mr. Paulson will again tag-team it with an afternoon hearing of the House Financial Services Committee.

Mr. Paulson, in prepared remarks for the House hearing, took a strong stand against the idea that the government should demand an ownership stake in the companies that accept the bailout.

The idea, backed by private economists and a growing number of lawmakers, would give taxpayers a bigger payback if the shares of companies that are rescued rise over time.

But Mr. Paulson was set to tell the panel the idea would undercut the purpose of the bailout by limiting the number of banks and other financial firms that would want to participate.

“I understand the view that I have heard from many of you on both sides of the aisle, urging that the taxpayer should share in the benefits of this plan,” Mr. Paulson said in his statement. “Let me make clear: This entire proposal is about benefiting the American people, because today’s fragile financial system puts their economic well-being are risk.”

But it was reported that Mr. Paulson has dropped his opposition on another major issue, agreeing to limits on pay and other compensation for executives of companies that receive federal help.

Mr. Bernanke served up a bleak assessment of state of the U.S. and global markets, warning what he called the nation’s financial “plumbing” was “under extraordinary stress.”

“The intensification of financial stress in recent weeks, which will make lenders still more cautious about extending credit to households and business, could prove a significant further drag on growth,” he said.

Story Continues →