Members of Congress are demanding more taxpayer protections and congressional oversight in the $700 billion bailout plan lawmakers are expected to debate this week to rescue failing U.S. financial institutions. As VOA's Dan Robinson reports from Capitol Hill, Congress is facing renewed pressure from volatile financial markets.
Under the plan, the federal government would spend hundreds-of-billions of dollars to purchase devalued assets, particularly U.S. mortgage debt, that has weighed down key financial companies.
But while there has been progress in negotiations with the White House, the Treasury Secretary and others, legislation has yet to be finalized.
Continuing volatility on Wall Street and in European markets on Monday, including a drop of nearly 373 points in the key Dow Jones industrial average, had lawmakers even more concerned about market confidence.
House of Representatives Speaker Nancy Pelosi and other Democratic leaders attempted to send a message aimed at calming market fears.
"We have all been engaged in bipartisan conversations, conversations between the legislative branch and the executive branch, to move in a direction that will give confidence to the markets that this legislation will pass and it will pass soon," she said.
Earlier, some House and Senate lawmakers voiced misgivings about the Bush administration proposal.
"[Treasury] Secretary [Henry] Paulson wants to set it up so that the taxpayers at best, and in all likelihood this couldn't happen, might break even some day," said Representative Peter DeFazio, an Oregon Democrat. "No, we need to take an equity assurance in these firms or we need to extend them loans. Have them mark down this junk to market it, there is a market for it. It's about 22 cents on the dollar; make them mark it down."
Representative Cliff Stearns is a Florida Republican.
"This plan increases our excessively high national debt to $11.3 trillion while also allowing foreign banks which hold U.S. mortgage debt to benefit from the billions provided by this bailout," he said. "This plan constitutes the largest government bailout in history. Yet it does nothing to protect the taxpayers."
Senate Majority Leader Harry Reid said Democrats are committed to acting. But he echoed calls for more accountability in any final legislation.
"We will not let haste abandon good judgment in the process," he noted. "The Bush administration has called on Congress to rubber stamp its bailout legislation, without serious debate or efforts to improve it. We can't let that happen."
Democrats also took the opportunity to place blame on President Bush and his economic policies.
Senator Barbara Mikulski was among Democrats saying that despite the urgency, lawmakers must exercise caution and not provide a "blank check" for the financial rescue plan.
"This senator will not be stampeded into voting for this Bush administration bill," she said. "So far during the last seven years, every time there is a crisis, they generate fear and they generate bad ideas."
As negotiations continue, there are conflicting accounts about unresolved issues.
House Financial Services Committee Chairman Barney Frank told reporters on Monday that "some resistance" remains on preventing foreclosures on mortgages the government would acquire under the Bush plan. Other areas of concern, he said, include bankruptcy provisions and restricting salary compensation for executives.
Frank said the administration agreed on the need for creation of a special oversight board.
"We are talking about a very powerful board with its own budget and funding that will get all of the reports and all the information," he explained, "but won't have any operational role [but will ask], 'What are you buying, what is your assumption about how you are buying, what kind of companies are you buying it [assets] in?"
House Speaker Pelosi said late Monday that Democrats are committed to working with Republicans to come up with a bipartisan measure, but said, "we are not sending a blank check to Wall Street."
Democrats want the House and Senate to consider identical pieces of legislation on the financial rescue plan.