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Congress prepared to work quickly on administration financial rescue plan

Key members call for bipartisan effort after meeting with administration officials.

By Staff writer / September 19, 2008

Senate Majority Leader Harry Reid (D), speaks to reporters after members of Congress met with SEC Chairman Chris Cox, 3rd left, and Treasury Secretary Henry Paulson, fourth from left, Speaker Nancy Pelosi (D), and Federal Reserve Board Chairman Ben Bernanke. right

AP

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Washington – With faith in government at an all-time low, congressional leaders have agreed to move urgently on a sweeping Bush administration plan to revive US financial markets.

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At the heart of the plan are new powers for the federal government to spend hundreds of billions of dollars to buy up bad assets, mainly mortgage-backed financial instruments, and provide help to homeowners facing foreclosure. The new moves, expected to be the most extensive government intervention in US markets since President Roosevelt’s New Deal, were greeted on Capitol Hill with the resolve to move quickly toward a bipartisan solution.

“We all understand the stakes, we have all committed to working with the administration, and we are all anxious to see their proposal within a matter of hours, not days,” said Senate majority leader Harry Reid, after a hastily arranged meeting of congressional leaders with US Treasury Secretary Henry Paulson, Federal Reserve Chairman Ben Bernanke, and Securities and Exchange Commission Chairman Christopher Cox Thursday night.

House Speaker Nancy Pelosi credited the administration’s initiative with aiming to resolve the nation’s financial crisis. “Our purpose is to do that and in doing so, to insulate Main Street from Wall Street and recognize our responsibility to the taxpayer, to the consumer, and to the people all across the country,” she said.

Republican leaders also struck a conciliatory tone. “We reached a bipartisan agreement to work together to try to solve this problem, and to do it in an expeditious manner,” added Senate Republican leader Mitch McConnell.
Such conciliatory language represents a sharp break with the highly partisan tone only a day earlier.

Informed – but not consulted – about the Federal Reserve’s decisions to bail out American International Group but not storied brokerage Lehman Brothers and to pour some $255 billion into financial markets Wednesday, Congress wanted to know how the Bush administration was navigating the crisis: On what basis was one firm saved and another left to market forces? What future liabilities would US taxpayers be forced to cover? And what was the plan for resolving the crisis?

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