Paulson's plan too long-term for some in Congress
Reception to reform is warm on the Hill, but lawmakers seek more urgent action.
In proposing a broad, complex overhaul of US financial regulation Monday, Treasury Secretary Henry Paulson cautioned that the plan would take years of patient negotiation to execute. Some elements could move in the near term, he said, but most must wait until "the current market stress is past."Skip to next paragraph
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But for many lawmakers – returning to Capitol Hill Monday after two weeks in their states and districts – the priority is quick, decisive action to show voters they grasp the magnitude of the crisis threatening the No. 1 investment of many families: their homes.
That disconnect is one reason for an initial mixed response to the Bush administration plan among key committee chairs, as well as many top GOP lawmakers.
"The administration's blueprint, while deserving of careful consideration, would do little if anything to alleviate the current crisis – which was brought on by a failure of will," said Sen. Christopher Dodd (D) of Connecticut, who chairs the Senate Committee on Banking, Housing and Urban Affairs, in a statement.
For Congress, the first step in a crisis is to summon those deemed responsible to a hearing room to lob tough questions at them in front of TV cameras. On April 3, the Senate banking panel will question regulators and CEOs of Bear Stearns and JPMorgan Chase about "the current market turmoil."
In the House, Rep. Barney Frank (D) of Massachusetts praised Paulson's initiative as "a very constructive step forward." But the "profound national discussion" needed to complete the initiative "cannot be concluded in the months before the election," said Mr. Frank, who chairs the House Financial Services Committee.
Still, Frank was encouraging. Paulson's rejection of the status quo and his argument "that new regulation done properly enhances the function of the market rather than detracts from it," says Frank, have narrowed differences with Democrats.