Congress prepared to work quickly on administration financial rescue plan

“I believe many members of Congress share my conviction” of the need to act speedily, Paulson said in a press conference Friday. Several key members of Congress are echoing the tone.

“We want to have an unconstrained discussion on what we do now,” said Rep. Barney Frank (D) of Massachusetts, who chairs the House Financial Services Committee, in comments before Thursday’s meeting.

“Now is not the time to seek political leverage or a quid pro quo. Too much is at stake for our families, workers, small businesses, and our economy,” said House Republican leader John Boehner.
Not everyone is on board, however.

Even before details of the plan were released, GOP conservatives signaled concerns about the impact of a massive federal intervention on free markets and the long-term liability for taxpayers. So far, they are the most prominent opponents of bailouts in Congress. Had it not been for the bad decisions of regulators, the Great Depression of the 1930s might have been a blip, they say. Moreover, taxpayers face “massive losses.”

“The last time I looked, the taxpayers lost about $150 billion the last time we had a Resolution Trust Corporation,” said Rep. Jeb Hensarling (R) of Texas, chairman of the conservative Republican Study Committee. The RTC, created to liquidate the assets of failing savings-and-loans companies in the 1980s, is one of the models for a new federal intervention in financial markets.

“Somebody has to speak up for the taxpayer, and enough is enough,” he added. “I’m not saying no to any solution that is on the table.... We’re looking at a lot of lousy options, but at this point in time that strikes me as a particularly lousy one.”

Sen. Jim DeMint (R) of South Carolina also registered his concerns about a possible deal in a statement Thursday: “I’m deeply troubled by this plan. What is missing from it and from the recent string of bailouts is a commitment to return to a free enterprise economy.”

“The federal government caused this problem by using taxpayer dollars to implicitly guarantee millions of mortgages, which have been sold as securities around the world,” he added. “This socialization of risk removed market accountability and has now set off a chain of events that is threatening our entire economy. What we need now is not what could be nearly a trillion dollars in new taxpayer bailouts, but pro-growth policies that allow our markets to correct and start growing again,” he adds.

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