Bush Seeks Broader Power For Bank Crisis

(CBS/AP)  The Bush administration asked lawmakers Thursday for the power to rescue banks by buying distressed assets that lie at the heart of the financial system's crisis.

Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke briefed lawmakers on the plan they are crafting.

Democratic Senate Majority Leader Harry Reid said he expected the administration and the Fed to have a proposal to lawmakers in a matter of hours, rather than days.

Paulson, Bernanke and Securities and Exchange Commission chair Christopher Cox asked lawmakers at the session to act swiftly in passing legislation.

"It will be the power - it may not be a new entity - it will be the power to buy up illiquid assets," Rep. Barney Frank said.

"There is this concern that if you had to wait to set up an entity, it could take too long," Frank said.

Frank said there was "virtually unanimous agreement" among lawmakers in attendance of the need for such action and that the House Financial Services Committee, which he chairs, could have a legislative drafting session on a proposal as early as Wednesday

One of the measures believed to be considered is creating something similar to the Resolution Trust Corp., which the government used in the 1980s to bail out the troubled savings and loans by buying up all their bad debt, reports CBS News business correspondent Anthony Mason. But critics say that crisis is different.

"The paper, the financial paper, sold then was not as damaged in its reputation as the subprime paper is today," Michael Greenberger, of the University of Maryland School of Law, told CBS News.

Meanwhile, the financial crisis continues to deepen, reports Mason. Wachovia reportedly is in talks to merge with Morgan Stanley and Washington Mutual is in desperate search for a buyer. And the credit markets have frozen as banks have become reluctant to lend even to each other.

"No one trusts anybody anymore," Paul McCulley, managing director of Pimco told CBS News. "They still do trust Uncle Sam. Mr. Paulson and Mr. Bernanke need to put Uncle Sam's money on the line to restore trust."

Stocks rallied more than 400 points late Thursday after a report that the Bush administration was working on a new plan to alleviate fallout from the housing and credit crises. Those debacles have badly bruised the economy and pushed unemployment to a five-year high.

"What we are working on now is an approach to deal with the systemic risk and the stresses in our capital markets," Paulson said.

"The root cause of the stress in the capital markets is the real estate correction," he added.

Bernanke said he looked forward to working closely with Congress to "resolve this financial crisis and get our economy moving again."

President George W. Bush canceled an out-of-town trip Thursday to stay in Washington and meet for 40 minutes with Bernanke, Paulson and Cox, along with White House and Treasury Department aides.

Rep. Nancy Pelosi said any potential action must protect taxpayers who are already on the hook for potentially billions of dollars in bailouts to financial firms taken down by the financial crisis.

Once Congress gets the administration's proposal, Pelosi said: "We hope to move very quickly. Time is of the essence."

Pelosi wrote to Bush on Thursday saying Congress would meet beyond its planned Sept. 26 adjournment, if necessary, "to consider legislative proposals and conduct necessary investigations" related to the financial crisis.

Administration officials said it was critical that Congress act next week, according to sources familiar with the meeting, who spoke on condition of anonymity because it was private.

Frank suggested Democrats might try to tie the authority to additional steps to help struggling borrowers keep their homes.

Republican leaders said any attempt to use the administration's request for leverage on other priorities would be inappropriate.

"Now is not the time to seek political leverage or a quid pro quo," said Reps. John A. Boehner of Ohio and Roy Blunt of Missouri, the top two House Republicans, in a statement.

[chrisbieber]

like the villain in Ayn Rand''s seminal classic Atlas Shrugged megalomaniac Wesley Mouch, Bush is demanding more POWER. Megalomania is rampant today, even more than the past and the bipartisan Surviellance Omnipotent Administrative Law Government and its "leader" are great examples to show what megalomania is. Yeah its easy to show examples and pictures of SOCIALIST Mussolini and SOCIALIST Hitler and SOCIALIST Mao...but despite the conditioning most Americans are so ignorant of the past/history only showing examples of today is what we have to work with.

Remember Orwells and Ron Paul''s amd Randolph Bourne''s warnings of tyranny.

Its right in front of you.

And you will probably vote for it.

As itTYRANNY is bipartisan.

[spiritwalk]

I believe those few short years, really that period between 1963 to about 1971, known as the 60s, truly changed our politics.
__________________________

I don''t think the 60''s changed anything. People are still the same hypocrits their grandparents were. The people who said they were anti-war and dodged the draft during Viet Nam are the same people who are sending the next generation off to war in Iraq. (*** Cheney dodged the draft, sent others off to war on a lie and then attacked Nam veterans Kerry and Max Cleland for being un-American.)
The children of 60''s who rejected materialism and said they wanted to see a social revolution are the ones today with the BMW''s who fight against universal health care because it might hurt their portfolio HMO investments.
Its the old story of people calling for change when they are on the outside who switch to supporting the status quo when they get on the inside.
Of course, they are the first ones to go after McCain or Obama about them selling out their ideals to get what they want.

[grandesign]

No one trusts anybody anymore," Paul McCulley, managing director of Pimco told CBS News. "They still do trust Uncle Sam. Mr. Paulson and Mr. Bernanke need to put Uncle Sam''s money on the line to restore trust."

Who is this Uncle Sam? A cartoon. We put our trust in a cartoon character because people of lesser character cannot be trusted. Does Uncle Sam really have money? Or does he have the ability to created debt bonds.

I think the cartoon character Uncle Sam is REALLY the invisible hand that moves the market.

Don''t tell anybody.

[fsw3]

By the way, I was a Catholic and I am now a Universalist, what party am I supposed to belong to?
I don''''t want to vote for the wrong candidate. What are my personal values?


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Posted by spiritwalk at 10:51 AM : Sep 19, 2008
The last Unitatarian/Universalist president was William Howard Taft. He would have no chance of being elected today. In fact, when he ran for reelection in 1912 he finished third, behind Woodrow Wilson, the Democrat and the Bull Moose Progressive Theodore Roosevelt. I am not sure what political party TR would be in today. Religious fundamentalism has become a new but non-constitutional requirement for office. There are plenty of intelligent, decent people of little or no religious faith who would make great presidents but they would not be seriously considered because they wouldn''t loudly profess a religous point of view. I believe those few short years, really that period between 1963 to about 1971, known as the 60s, truly changed our politics. The social issues, what Pat Buchanan dubbed the ''culture wars'' had people who would have been voting Democratic all these years, voting Republican, and, I believe against their economic interest.

[indianaman13]

Last week Bush said everything was fine, today, we''re in trouble but working to fix it. Typical. Tell the public a lie, until you have to tell the truth. I dare anyone to Google "Republican Scandals" AND COMPARE to "Democrat Scandals" and count the difference between the two. Republicans win hands down. Republicans have won the scandal race since Reagan, whos Presidency resulted in the most criminal convictions of any presidency. History lesson, Since Nixon, Democrats have only had 2 presidents Carter and Clinton, equaling only 12 years of power. Republicans, however, have had 5 presidents. So I would say the problems of America can be squarely laid at the feet of Republicans. Actions speak louder than any silver tongued liar.

[spiritwalk]

I guess it was a real surprise for African-Americans to have joined the party of Lincoln and the wake up one morning and find themselves in the party of the old south. Imagine going to be thinking you had a black face and waking up to find you had a red neck.
And..don''t get started on Theodore Roosevelt and political parties. That anti-American actually ran for president on a third party ticket. He was like that pinko Lieberman. Imagine anyone having the gall to try to destroy our political system by refusing to quit his Senate seat when the Democratic party told him to. Then he had the nerve to let the voters decide to send him back to Congress. How dare he try to topple the entire system. If this is allowed to keep on happening we could actually have people in Washington who are dependent on the voters to stay in office and not party bosses. Then, if we ever were to let the voters have a real choice in who becomes president and not leave it in the hands of the political machines we could end up with...George Washington.
By the way, I was a Catholic and I am now a Universalist, what party am I supposed to belong to?
I don''t want to vote for the wrong candidate. What are my personal values?

[wogerwabbit]

I completely believe the poster below who claims that Obama writes his own speeches. They are completely empty of real content and meaning, just as his entire legislative career has been. ROFL

Posted by vranger at 09:15 AM : Sep 19, 2008

You''ve obviously not listened to any of his speeches or you wouldn''t post something so stupid.

[fsw3]

Spiritwalk, I suppose it would have been easier but political parties, at least in times past, were part of one''s identity. I could walk down my old neighborhood at look at the houses. I would know that one house was Methodist and Republicans, another house was Democratic and Catholic. Some were Baptist. Religous and political affiliations are strong and they do not change easily. Times and situations make the shift. From the days of abolition to the New Deal, most African-Americans were Republicans, even when President Warren Harding was sworn in as a member of the Ku Klux Klan in the Oval Office. Look at the story of American Presidents. All those guys from Lincoln on to Theodore Roosevelt, at least, were thought to be liberals, Grant, Garfield, Chester A. Arthur, McKinley. These things happen generations ago, and, in time, the party identifications faded.

[spiritwalk]

FSW3

I still am a bit confused about the switch thing. Wouldn''t it have been easier for individuals to switch parties rather than have the parties abandon their positions. It must have been a real hastle and expense to have to order new stationary and banners. Perhaps it was a true example of bipartisanship and everybody just swapped offices and office supplies.
I guess they would have had to swap schedules as well. All the liberal Republicans that were scheduled to go to the pro-abortion rallies would have had to switch with the conservative Democrats who were scheduled to go to the pro-gun rallies. It must have been a real mess.
I was thinking that McCain and Obama weren''t very bright to keep sounding like they were always changing their positions. Now I understand how difficult it must be for the candidates to remember what postions the party leaders want them to support when party leaders keep changing their positions to maintain their base of power. Its hard to keep track of what your personal values are when the party keeps changing them for you.

[fsw3]

Let%u2019s face it, the NAACP and the Ku Klux Klan aren%u2019t going to just switch positions without a good reason. So why did the Republican leaders and the Democratic leaders switch positions? It wouldn%u2019t be to keep themselves in power. Would it? We can trust the parties not to abandon their values as an expediency of holding on to power, can%u2019t we?



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Posted by spiritwalk at 09:39 AM : Sep 19, 2008
The shift really began in 1896 with the nomination of William Jennings Bryan. The switch was a long time in coming but was spurred on greatly with FDR''s New Deal. By then, the Democrats were pretty much what we call the liberal and, mostly internationalist party. Republicans were the ''respectable'' conservatives since the post war, but a further shift began with Goldwater in 1964. With the public becoming disenchanted with the ways things were going with Viet Nam, Watergate, and the Great Society, the hard right turn for the Republicans was cemented in the 1980 election of Ronald Reagan. The Democrats became essentially the Social Democrats of America. The so-called Republican Revolution of 1994 was essentially a shift in party membership by congressional members. The old Dixie-Crat Democrats shifted to being Republicans. They didn''t really change their politics.