Dems seek to slash bailout; Bush on TV tonight

September 24, 2008 7:19:41 PM PDT
President Bush summoned Barack Obama, John McCain and legislative leaders to an extraordinary White House summit, warning Americans and Congress on Wednesday night that failing to act on a $700 billion financial industry bailout could lead to "a long and painful recession." Earlier, Bush bowed to Democratic demands to limit the pay of executives whose tottering companies would be rescued.

Democrats and Republicans were nearing agreement on the rescue legislation, the most sweeping government intervention in the market since the Great Depression, and set a meeting early Thursday to draft a bipartisan bill.

Bush acknowledged in a prime time television address Wednesday night that the bailout would be a "tough vote" for lawmakers. The administration appeared to be softening its resistance to Democrats' demand that the eye-popping cost be phased in rather than dispensed all at once.

But Bush strongly urged Congress to act quickly to pass the plan, warning Americans in his 12-minute speech that failing to act fast risked dire economic consequences such as disappearing retirement savings, rising foreclosures, lost jobs and closed businesses.

"Without immediate action by Congress, America could slip into a financial panic, and a distressing scenario would unfold," Bush said as he worked to resurrect the unpopular bailout package.

With the administration's original proposal considered dead in Congress, top House leaders issued an upbeat statement late Wednesday saying there was progress toward revised legislation that could pass.

"We are committed to continuing to work cooperatively and on a bipartisan basis to safeguard the interests of the American taxpayers," said Speaker Nancy Pelosi, D-Calif., and House Republican leader John Boehner of Ohio.

Sen. Dick Durbin of Illinois, the Senate's No. 2 Democrat, expressed optimism that Congress could work through the weekend and pass the measure, possibly by the time markets open on Monday.

Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke spent most of the day at the Capitol, shuttling between public hearings on the proposal and private meetings with lawmakers.

Presidential politics intruded, as well, when McCain said he intended to return to Washington and called on Bush to convene crisis meetings until an agreement was reached on legislation.

In their statement, Pelosi and Boehner said, "We agree that key changes should be made to the administration's initial proposal. It must include basic good-government principles, including rigorous and independent oversight, strong executive compensation standards, and protections for taxpayers."

Earlier, Paulson agreed to demands from critics in both parties to limit the pay packages of Wall Street executives whose companies would benefit from the proposed bailout.

"The American people are angry about executive compensation and rightfully so," Paulson told the House Financial Services Committee. "We must find a way to address this in the legislation without undermining the effectiveness of the program."


Load Comments