Capitol Hill's Bailout Blame-Game

Jill Jackson is a Capitol Hill field producer for CBS News.
It's not easy to figure out whom or what, exactly, is to blame for the current financial crisis. But the latest hit this week when the Federal Reserve bailed out AIG, the largest insurance company in the world, got members of the House ready to point fingers. It was the final straw in a series of economic rescues and interventions by the Department of the Treasury and the Federal Reserve that put tax payers on the line for possibly hundreds of billions of dollars. In an election year, lawmakers do not want taxpayers – otherwise known as voters – to think they put them there.

Last night, House Speaker Nancy Pelosi started pointing her finger directly toward the other end of Pennsylvania Avenue. "The most recent bailout initiated by the Bush Administration is just another example that George Bush is a failed manager," Pelosi said after announcing hearings to investigate fraud and look at what new regulations will be needed in the future. And today, the speaker threw numerous punches at Sen. John McCain calling the presidential candidate the "greatest deregulator."

House minority leader John Boehner was confident that he could identify the source. "The root of the problem started with Fannie Mae and Freddie Mac," Boehner said referring to the giant mortgage finance companies taken over by the Treasury Department last week. Then Boehner blamed the Democratic Chairmen in charge of market oversight in the House and Senate, Barney Frank and Chris Dodd. "Everyone in this town knew the regulator for Fannie and Freddie were weak," Boehner said. "But Barney Frank and Chris Dodd stood in the way of anything moving."

Fiscal conservatives in the House backed up Boehner's assertion that Fannie and Freddie are responsible. And they also blamed Democrats. But they're clearly not trusting the Bush Administration these days either. Members sent a letter to both Fed Chairman Ben Bernanke and Treasury Secretary Hank Paulson asking for assurances that there would be no more government bailouts. Rep. Michelle Bachman of Minnesota ticked off the major companies that the financial world insists are too big to fail. "What's next?" Bachman asked. "Starbucks?"

The only thing lawmakers in the House seem to agree on is that they want to know more from the Bush Administration. Why did they decide to bailout AIG when there was some kind of offer on the table? Will there be any more massive saves of financial giants? Republicans wanting answers to those questions had to cancel two meetings because no one from the administration would come to brief the lawmakers.

And they want answers fast. Hearings examining the latest decisions to let Lehman Brothers go bankrupt, but to rescue AIG begin next week. And while those hearings will continue into October, most lawmakers are scheduled to go back to their districts, campaign hard and assure voters before Election Day that they are not to blame.

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    Jill Jackson is a CBS News senior political producer.