THE biggest US government bailout in history may eventually win congressional approval but not easily, not without changes and not before lawmakers are finished venting what they call the frustrations of ordinary Americans over Wall Street greed and bad judgment. Fear that the US economy would worsen if the government does nothing could help propel the legislation to passage. But the bipartisan skepticism that greeted Treasury Secretary Henry Paulson and Fed Chairman Ben Bernanke in Congress Tuesday showed the $700 billion rescue package will be a hard sell at best. One refrain that ran though questioning at a Senate Banking Committee hearing that lasted more than four hours was why should the captains of finance who caused the mess in the first place be rescued while Americans who are losing their homes or seeing the value of them tumble be left footing the bill. Democrats said there was good reason for wariness. This was not the first time they had heard urgent Bush administration requests for sweeping grants of power accompanied by threats of dire consequences for inaction. Was this a fiscal version of the USA Patriot Act? A Wall Street variation on the Iraq war resolution? For Republicans, the legislation goes against long-held party dogma of keeping the government out of markets and off the backs of business. It gives the government sweeping new authority over the nation's financial and economic life. “It is financial socialism and it's un-American,” declared Sen. Jim Bunning, an outspoken Republican critic of the plan to buy up and eventually resell troubled mortgages. Members of both parties said they were unhappy about the size and fairness of the package and its grant of vast powers to a single individual, the treasury secretary. The original administration draft, for instance, asserts that decisions by the secretary “may not be reviewed by any court of law or any administrative agency.” “This language, in my view, cannot last,” Senate Banking Committee Chairman Chris Dodd, a Democrat, told Paulson. Afterward, Dodd told reporters: “What they have sent to us is not acceptable.” Dodd said a proposal still could be passed before the November election but that it would require the administration working closely with Congress. Thomas Mann, a senior fellow at the Brookings Institution, a Washington-based think tank, said coming up with a version acceptable to lawmakers “is going to take a while, and rightly so. Fear of an economic meltdown will be sufficient to produce an outcome, but the legislation will look different than what was sent up.” Some form of oversight over Treasury and restrictions on executive salary may be added, for instance. An army of financial industry lobbyists has joined the administration in pressing for swift action and in seeking to persuade lawmakers to resist consumer-friendly Democratic amendments, including one that would give courts power to rewrite mortgages to lower bankrupt homeowners' monthly payments. With unemployment rising, home values falling, gasoline prices still high and credit hard to come by, economic angst is widespread. In a CNN-Opinion Research Corp. poll released Tuesday, only one in 10 said they do not think the financial crisis would affect them or their families. About a third said they expect to feel the impact immediately, one in five said they would feel it in a year, and another four in 10 said they expected to be affected eventually. Eight in 10 worry that the economy will worsen if the federal government does not act. But about the same number also worry that the people who caused the problems will benefit from the bailout, the poll showed. With Election Day just six weeks off, lawmakers are understandably jittery. “My constituents, and indeed taxpayers across the nation, are asking how we arrived at this crisis. It is infuriating,” said Republican Sen. Elizabeth Dole, running for re-election in one of a handful of states where once-safe Republican incumbents are now considered at risk. Paulson said he shared the senators' chagrin. “I'm not only concerned, I'm angry” over the financial turmoil gripping the nation. But he and Bernanke insisted that fast action was important to stabilize markets. In any event, he added, “the taxpayer is already on the hook.” Paulson was reminded that neither he nor other members of the current administration were likely to around after Jan. 20 – and could not be held responsible to Americans if the bailout is a bust. Clearly, picking up the pieces will be left to the next president and next Congress. Neither Democrat Barack Obama nor Republican John McCain has specifically endorsed the Paulson plan. But since both are senators, they will have a chance to cast votes on whatever emerges. Obama has joined other Democrats in calling for safeguards and consumer protections, saying that Bush's “stubborn inflexibility is both unacceptable and disturbingly familiar.” McCain blames Wall Street greed and mismanagement at Fannie Mae and Freddie Mac for the crisis. He has called for more regulation and an expanded government role in helping financial institutions unload toxic loans. Both Obama and McCain want limits on executive pay and increased oversight of the Treasury Department. – AP __
