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US Lawmakers Continue to Voice Concerns Over Financial Bailout
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.
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.
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