CQ Politics
Published: 09-23-08
President Bush urged Congress to complete action quickly on a rescue plan for the nation’s financial system but key Democrats signaled Monday they will not be stampeded into signing a blank check.
Christopher J. Dodd D-Conn. chairman of the Senate Banking Housing and Urban Affairs Committee circulated his own legislative proposal that would set tough limits on executive compensation for companies participating in the bailout and allow the government to take an equity stake in those firms.
Dodd’s draft which goes beyond a measure promoted by Barney Frank D-Mass. chairman of the House Financial Services Committee is the most ambitious rewrite so far of the Treasury’s original plan to buy up to $700 billion worth of distressed debt from ailing financial firms. It would place tough restrictions on the program in contrast with the nearly unfettered authority requested by Treasury Secretary Henry M. Paulson Jr.
Bush pressed Congress to resolve its concerns quickly. The financial markets remained skittish meanwhile as stocks — which had soared at the end of last week when news of the bailout plan surfaced — pulled back.
Democrats led by Dodd and Frank continued to insist that any bailout package needs stronger accountability provisions and some curbs on executive compensation — curbs Paulson and many congressional Republicans are resisting.
Frank said if Paulson would agree to such provisions the bill could move quickly. Otherwise he warned “it slows it down a little bit.
Dodd’s demand that the government receive an equity stake in the companies getting relief could complicate matters further. But so could a new administration request to broaden the bailout to all Treasury to buy up all types of “troubled assets” not just mortgage-related securities and to permit participation by foreign companies with “significant operations” in the United States.
