$700 billion requested for mortgage bailout
Bush administration requests taxpayer money in order to end economy's serious financial crisis
Kevin G. Hall
Issue date: 9/22/08 Section: Nation & World News
WASHINGTON D.C. (MCT) - The Bush administration on Saturday asked Congress for $700 billion in taxpayer money to get bad mortgage assets off the books of troubled financial institutions in a bid to end the U.S. economy's most serious financial crisis since the Great Depression, according to a draft of proposed legislation circulating in the capital.
The amount is staggering, and would likely hamper the ability of the next president to pursue new domestic programs without major tax increases. It also comes at a precarious time when the country is facing increases in spending as the nation's 75 million baby boomers begin to reach retirement age in 2010.
As part of its proposal, the administration also asked Congress to raise the nation's debt ceiling from its current level of $10.6 trillion to $11.3 trillion.
Members of Congress and administration officials were locked in negotiations over the proposed legislation, with both sides saying they would like a final bill ready before markets open on Monday.
A person familiar with the talks said that there had been major disagreements over who would pay for the expected cost and how.
Congressional negotiators also want the bill to spell out more clearly who would supervise the Treasury's purchase of the bad debts; the administration's proposal simply assigns the responsibility to Treasury Secretary Henry Paulson and gives him authority to hire whatever people or outside firms he needs to do the job.
In public statements, some Democrats were critical that the proposal didn't include relief for average mortgage holders.
"This is a good foundation of a plan that can stabilize markets quickly," New York Democratic Sen. Chuck Schumer, chairman of Congress' Joint Economic Committee said in a statement. "But it includes no visible protection for taxpayers or homeowners. We look forward to talking to Treasury to see what, if anything, they have in mind in these two areas."
The top Republican in the House also voiced reservations about the plan.
The amount is staggering, and would likely hamper the ability of the next president to pursue new domestic programs without major tax increases. It also comes at a precarious time when the country is facing increases in spending as the nation's 75 million baby boomers begin to reach retirement age in 2010.
As part of its proposal, the administration also asked Congress to raise the nation's debt ceiling from its current level of $10.6 trillion to $11.3 trillion.
Members of Congress and administration officials were locked in negotiations over the proposed legislation, with both sides saying they would like a final bill ready before markets open on Monday.
A person familiar with the talks said that there had been major disagreements over who would pay for the expected cost and how.
Congressional negotiators also want the bill to spell out more clearly who would supervise the Treasury's purchase of the bad debts; the administration's proposal simply assigns the responsibility to Treasury Secretary Henry Paulson and gives him authority to hire whatever people or outside firms he needs to do the job.
In public statements, some Democrats were critical that the proposal didn't include relief for average mortgage holders.
"This is a good foundation of a plan that can stabilize markets quickly," New York Democratic Sen. Chuck Schumer, chairman of Congress' Joint Economic Committee said in a statement. "But it includes no visible protection for taxpayers or homeowners. We look forward to talking to Treasury to see what, if anything, they have in mind in these two areas."
The top Republican in the House also voiced reservations about the plan.
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