Bush Seeks Broader Power For Bank Crisis

White House Wants To Buy Distressed Assets From Banks In Danger Of Failing; Needs Congress' OK

(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?


--------------------------------------------------------------------------------

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?



--------------------------------------------------------------------------------

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.

[spiritwalk]

I am a bit confused here. I guess I am kind of dumb when it comes to understanding political parties and maybe someone can explain it to me.

In 1860 the Republicans were the liberal, Federalist Party and the Democrats were the conservative Ant-Federalist Party. In essence, that was the basis for the Civil War. The Republicans said they wanted a strong federal based government and the Democrats wanted less federal control. Now the Democrats are the liberal, federal party and the Republicans the conservative anti-federal government party. How did that happen?

I would have assumed that if the individual voters had changed their positions they would have just changed parties. It sounds though as if the power brokers running the parties abandoned their positions and altered them to go along with the political winds. But, that can%u2019t be what happened.

I know that the people who are at the top of the party systems would not be so cynical as to give up the values they said they believed in just to remain in a position of power. 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?

[vranger]

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

[jjp735i]

Everything Bush touches fails. And once again not one single person who caused the problems will pay the price but the tax payers will. George W. Bush is an arse and should be flushed from the White House.

[geneonlbk]

Bush has been very good for the wealthy class and toxic for America and much of the world. He has shown himself to be stupid and callous. He has demonstrated that he is incapable to telling the truth and that his agenda is really Chaney''s neo-con agenda. Now people want four more years of the same or even worse. Go figure.

[kcblogger]

Spirit -

I am not the average political nut... I have studied politics for over 25 years with a degree in it. I know what the fore fathers intended... I have read the Federalist Papers... I also know there are things we can control and things we cannot control and when things are beyond any control. However, I have also followed Obama for over 5 years. I have known who he was long before 99 percent of the entire population had ever heard his name... I know he writes his own speeches I know he has no time right now to write his own speeches because he is concentrating on many many things that you have no comprehension of... I know he does however proof his speeches and makes the necessary changes before he presents them to you. I know he has no ties to oil nor does he have ties to defense contractors... I know he does not have the backing of the pharmacutical companies or the insurance companies. I know where his campaign money comes from and I know you are starting to annoy me.

So... like I said.. just go away... well... unless you can figure out how to get this country back to the origination of what our fore fathers intended for this great land of ours before you and I end up in the soup line... GET IT? GOT IT? GOOD!!!

[spiritwalk]

Obama and McCain do not reflect their own views. They reflect the views of their party platforms. That is why they keep seeming to contradict themselves.

Obama and McCain do not express their own views, they read the speeches that their speech writers provide them, that is why they keep saying dumb things like "lipstick on a pig".

This is why Reagan was such a great political candidate. Candidates are just actors telling the story that will amuse people and get them to buy some Borax.

Just watch the candidate. Pay no attention to the man behind the curtain. The power brokers don''t want you to have a brain to think about what is happening, the heart to really care about anything else but your own interest nor the courage to try to change the system.

[spiritwalk]

kcblogger

I guess the debating point "a rat''s azz" came from your time on the Oxford Debating Society.

If you don''t give a rat''s azz about the Federalist Papers the don''t give a rat''s azz about FOX. They are the same thing.

And if you don''t care about what the Founding Father''s said then don''t trot out the Constitution only when it suits you. It is not a a la cart menu.

The media doesn''t know what it''s talking about, I don''t know what I am talking about and now the Founding Fathers didn''t know what they were talking about.

Is there anyone who knows what they are talking about besides you?

[kcblogger]

Spirit-

go away

[spiritwalk]

kcblogger

Why should the power brokers stop controlling the news when it is working so well. FOX is doing a tremendous job. You just parroted their entire agenda and they have you thinking that you are against what they are saying.

Sounds to me like they know what they are doing. you have to admire anyone who can come up with propaganda that can get the opposition to support you and not know it. You can despise them, but you have to respect them.

[kcblogger]

Spirit -

I do not need a lesson from you. I have several degrees and one is in Political Science. Another is in American History. Save your looking down your nose for someone else who gives a rat''s azz about the Federalist Papers. This situation is way beyond your history lesson on what the Fore Fathers wanted for this country. That is why I don''t wish to discuss this with you. We are way beyond that right now.