WORLD> America
|
WORLD> America
|
|
Paulson urges quick OK on $700b rescue
(Agencies)
Updated: 2008-09-22 06:53 "We need to look at what is going on in the credit markets and they are still very fragile right now and frozen," Paulson said on NBC's "Meet the Press." In addition to what is happening in the United States, Paulson said he was confident that other major countries would take similar actions to support their financial systems, helping to avert a global meltdown. "We have a global financial system and we are talking very aggressively with other countries around the world and encouraging them to do similar things and I believe a number of them will," Paulson said on ABC's "This Week." He refused to name the countries that he expected would act. Congressional Democrats said they understood the need for urgency but insisted that the measure needed to provide help for homeowners threatened with losing their homes. And some GOP leaders told the White House on Sunday to prepare to accept more oversight and guarantees that the Treasury will recoup some of the bailout money. Republicans, however, appeared less eager to support several other Democratic proposals. One would change bankruptcy laws to allow for mortgages to be modified, something financial companies have strongly opposed. Another would cap benefit packages for executives at the huge Wall Street firms that will be selling their bad debt to the government. "It would be a grave mistake to say that we're going to buy up a bad debt that resulted from bad decisions of these people and then allow them to get millions of dollars on the way out," said House Financial Services Chairman Barney Frank. "The American people don't want that to happen and it shouldn't happen." Senate Banking Committee Chairman Christopher Dodd told reporters at a Capitol Hill news conference on Sunday that while he hoped Congress could pass the legislation this week "if it takes a little longer, then so be it." He said financial markets should be reassured that Congress was moving toward a significant response and a few more days to "get it right" should not trigger a renewed nosedive on Wall Street. The whole congressional debate is occurring just weeks before voters go to the polls. Both US Democratic presidential candidate Barack Obama and Republican John McCain have given grudging support to the bailout effort. Obama has also called on Congress to pass a second economic stimulus bill given the economy's weak state, with unemployment at a five-year high of 6.1 percent. While Paulson gave no indication during the interview shows of what changes the administration would be willing to accept, the administration did modify an early draft obtained by The Associated Press in a significant way. A later version expands the definition of the financial firms that would qualify to sell their bad debt to the government to include not just US firms but also foreign firms doing business in the United States if the government decides debt purchases from those firms are needed to stabilize the financial system. Sen. Charles Schumer said that he believed there would be changes to Paulson's plan and that agreement could still be reached quickly. Schumer said that he was pushing to get a provision where the government would receive stock warrants in return for the bailout relief and for creation of a government oversight board to supervise the huge operation, which under Paulson's plan would be run out of the Treasury Department. He said Paulson seemed receptive to changes when he had discussed his ideas with him. Republicans warned against too many amendments. "This would be the most serious financial crisis that the world has ever dealt with. It is not a time to be playing games," said House Republican Leader John Boehner. Paulson said in his round of interviews that the nation's outdated regulatory system for financial markets must be overhauled but the first job is to get the rescue package through Congress and then deal with a comprehensive regulatory overhaul next year. The administration's proposal seeks an increase in the limit on the national debt from $10.6 trillion to $11.3 trillion to make room for the massive rescue. But Paulson said that the government would recoup a part of the $700 billion when the housing market recovers and the mortgage assets rebound in value. |
