Bush Seeks $700B For Bad Debt Bailout

Administration Asks Congress for Ability To Buy Bad Mortgages, Raise National Debt Ceiling To $11.3 Trillion

(CBS/ AP)  The Bush administration asked Congress on Saturday for the power to buy $700 billion in toxic assets clogging the financial system and threatening the economy as negotiations began on the largest bailout since the Great Depression.

The rescue plan would give Washington broad authority to purchase bad mortgage-related assets from U.S. financial institutions for the next two years. It does not specify which institutions qualify or what, if anything, the government would get in return for the unprecedented infusion.

Democrats are pressing to require that the plan help more strapped borrowers stay in their homes and to condition the bailout on new limits on executive compensation.

Congressional aides and administration officials are working through the weekend to fill in the details of the proposal. The White House hoped for a deal with Congress by the time markets opened Monday; top lawmakers say they would push to enact the plan as early as the coming week.

"We're going to work with Congress to get a bill done quickly," President Bush said at the White House. Without discussing specifics, he said, "This is a big package because it was a big problem."

But lawmakers digesting the eye-popping cost and searching for specifics voiced concerns that the proposal offers no help for struggling homeowners or safeguards for taxpayers' money.

"The federal government is going to have loans that aren't repaid," Peter Morici, an economist at the University of Maryland, told CBS News. "That's the American public, and in turn it will take possession of the houses and have to resell them."

Morici estimates Americans might end up permanently responsible for half the debt - up to $300 billion, reports CBS News correspondent Kimberly Dozier. Congress wants to help those borrowers out by helping them refinance those bad loans, but that's not part of the deal so far.

The government must bail out the financial system "because if we don't, it will have a tremendous impact on American consumers, homeowners, taxpayers and the rest," House Speaker Nancy Pelosi, D-Calif., said at a citizens' workshop in San Francisco.

But, she added, "We cannot deal with this unless this bailout helps families stay in their homes."

Sen. Chuck Schumer, D-N.Y., called the plan "a good foundation," but said it was missing "some kind of supervisory authority, and some kind of protection for homeowners and taxpayers."

The proposal would raise the statutory limit on the national debt from $10.6 trillion to $11.3 trillion to make room for the massive rescue, a move that some economists say is only realistic alternative in the face of dire alternatives.

"The American people are furious that we're in this situation, and so am I," the House's top Republican, Ohio Rep. John A. Boehner, said in a statement. "We need to do everything possible to protect the taxpayers from the consequences of a broken Washington."

Signaling what could erupt into a brutal fight with Democrats over add-on spending, Boehner said "efforts to exploit this crisis for political leverage or partisan quid pro quo will only delay the economic stability that families, seniors, and small businesses deserve."

Bush said he worried the financial troubles "could ripple throughout" the economy and affect average citizens. "The risk of doing nothing far outweighs the risk of the package. ... Over time, we're going to get a lot of the money back."

He added, "People are beginning to doubt our system, people were losing confidence and I understand it's important to have confidence in our financial system."

Neither presidential candidate took a position on the proposal. GOP nominee John McCain said he was awaiting specifics and any changes by Congress.

Democratic rival Barack Obama used the party's weekly radio address to call for help for Main Street as well as Wall Street.

"We need to help people cope with rising gas and food prices, spark job creation by repairing our schools and our roads, help states avoid painful budget cuts and tax increases, and help homeowners stay in their homes," Obama said. "And we must also ensure that the solution we design doesn't reward particular companies, or irresponsible borrowers or lenders, or CEOs, some of whom helped cause this mess."

Their language reflected a tricky balance that politicians in both parties are trying to strike, just six weeks before Election Day: Back a plan that doles out hundreds of billions to companies that made bad bets and still identify with the plight of middle-class voters.

Besides mortgage help and executive compensation limits, Democrats are considering attaching middle-class assistance to the legislation despite a request from Bush to avoid adding items that could delay action. An expansion of jobless benefits was one possibility.

Bush sidestepped questions about the chances of adding such items, saying that now was not the time for posturing. "I think most leaders would understand we need to get this done quickly, and you know, the cleaner the better," he said about legislation being drafted.

Treasury officials met congressional staff for about two hours on Capitol Hill on Saturday. Discussions centered on how the plan would work, and Democrats proposed adding the executive compensation limits and new foreclosure-prevention measures.

Among the key issues up for negotiation is which financial institutions would be eligible for the help. The proposed legislation doesn't make it clear, leaving open the question of whether hedge funds or pension funds could qualify.

The proposal does not require that the government receive anything from banks in return for unloading their bad assets. But it would allow the Treasury Department to designate financial institutions as "agents of the government," and mandate that they perform any "reasonable duties" that might entail.

The government could contract with private companies to manage the assets it purchased under the rescue.

Treasury Secretary Henry Paulson says the government would in essence set up reverse auctions, putting up money for a class of distressed assets - such as loans that are delinquent but not in default - and financial institutions would compete for how little they would accept.

If enacted, the plan would give the treasury secretary broad power to buy, manage and sell the mortgage-related investments without any additional involvement by lawmakers. It would, however, require that the congressional committees with oversight on budget, tax and financial services issues be briefed within three months of the government's first use of the rescue power, and every six months after that.

[mustcomment]

Why should taxpayers bail out all of our irresponsible wealthy neighbors? I didn''t buy a house because I couldn''t afford one. Doesn''t that make sense?

[riddelup]

Once we rushed to action and granted broad powers to a man who said he was going to fight terrorism. Instead he attacked a country with no ties to terrorism. This is not about him but about rashly giving authority to an entity claiming to have a solution to our problems. We cannot solve our problem by throwing money at them. We have a business sector who has badly mismanaged vast amounts of money, we now propose as a solution to give them huge amounts of money to further mismanage. This does not sound like a solution to me. I know congress is being lead around by high pressure lobbyist but we have the vote. The vote is all we have. Do not allow them take money from the needy and give to the greedy. Avarice is not an attribute.

[riddelup]

If you took 700 billion dollars and divided it between every adult citizen in the U.S. that would do more to save our system? If you think not you are not doing the math. All parties all peoples unite to prevent this lobby brokered travesty.

[mytoosense]

FDR started the National Dept during WWII, It stayed below one trillion dollars until Reagan took office. It was below six trillion dollars when Dubya took office. As a member of the party who preach fiscal responsibility, Bush Junior has doubled the dept to $11+ Trillion Dollars and what does this country have to show for it?

He can''t seem to be able to solve problems even by throwing obscene amounts of money at them.

The Republican Party and every American who voted for this Bafoon owes the rest of us an apology.

[kenammons]

congress please say no to this corrupt corporate bailout at the taxpayers expense. not another trillion dollars of wasted tax money under george the evil one

[lochlan-2009]

the House''s top Republican, Ohio Rep. John A. Boehner, said in a statement. "We need to do everything possible to protect the taxpayers from the consequences of a broken Washington."


Fricken idiot!!! It''s corruption in D.C. from corpoarations to lobbyists to representatives and the media who stay silent, who should all be in prison for life for treason against America. But is D.C. going to do anything about it........ I think we all know the answer to that. NOT A CHANCE!!!!!!

[bm6005]

Question of the day: How does a retired military man from a line of military men manage to amass a personal wealth of $5 mil? Was this money earned while in the Navy? If so they certainly pay better than when I was in. If, as I suspect, it all was earned AFTER he became a congressman my question is answered!!!

[bm6005]

Are these your buds Georgie? The haves and the have mores?

[magoo2u1]

We are so screwed.

[babooph]

I still recall his request for 50 billion for the Iraq war-seems we end up with a "little " more-will there be enough left for tents for what was the middle class,or will they make their own,like in Africa-you know -the corrupt place.

[txgrouch2006]

EIGHT YEARS FROM NOW (IF our country still exists)

The US dollar will be worthless on the foreign market. We will be unable to buy ANY imports. Manufacturing will be forced to move back here OUT OF NECESSITY. We will become a self-sufficient and independent economy.

Foreign countries will cease to buy our bonds. Once we cease buying their exports to support their economy, they have no reason to continue lending money to us to prop up our sham economy. All deficit spending will cease.

Foreign sham economies that have been scavenging off ours will either sink or swim without us. Some or all will collapse, and they will cease to pose a threat of foreign competition in ANY market.

Credit will be unobtainable in this country. We will be forced to live within our means. If we want something expensive, we will have to SAVE OUR PENNIES and buy it out of savings.

There will be a mass exodus of recent immigrants when they realize things are better back home. So they%u2019ll go back home.

Illegal workers will stop at the border and ask themselves, %u201CIs it REALLY worth the trip? Things STINK there.%u201D

Even the lowest paying jobs will become available to PERSONS WHO WERE BORN HERE. And we%u2019ll take them because WE HAVE NOWHERE TO GO BACK TO.

In other words, WE WILL BE FORCED TO DO WHAT WE SHOULD HAVE BEEN DOING ALL ALONG. But instead of doing it by choice, we will be FORCED INTO IT THE SLOW AND PAINFUL WAY.

[joe68sg1]

BajaJohn1
I have been saying this for a long time...glad to hear someone else agree.
Get the criminals out of government, and wall street, and our country will survive.
Leave them continue and we are doomed...
ANYONE that makes less than $100k/yr and votes for the republiCONS is an IGNORANT IDIOT !!!

[downtowner97]

This could all be fixed if America learned to make things others in the world wanted to buy. It''s time to put 700 billion into novel forms of electricity production like fuel cells and largescale fusion reactors instead of bailing out crooked corporations. Unlimited free electricity would make the US rich and the world a cleaner, better place. The newly created companies that control the patents on the technology could continue to feed our government in the way they''ve become accustomed, so everyone could win.

[stn_sage]

Well, the vote on Bush''s corporate WELFARE plan to BIG BUSINESS will show all Americans which of their legislators'' are TRAITORS when they cast that vote which will comdemn future generations to abject poverty and countless suffering!

Put up a bill, vote on it, and show us WHO the traitors are! We DESERVE to know, with all the cr@p we''ve put up from this useless government!

Part 2

[stn_sage]

I left out a couple comments from my last post.

Republicans are WORSE than AL Queda!

Al Queda have done virtually nothing to America---yet!
And, for you dummies who don''t know it yet, THEY didn''t do 911---it was an inside job!

Whereas, Republicans have been an economic DISASTER to everyone who isn''t wealthy!

Not only has their lack of regulation resulted in Wall Street''s meltdown, but rising unemployment, loss of good paying jobs, rising costs on everything!, a soaring budget deficit and national debt, a worthless dollar, and made us a joke in the world community!

If these things weren''t bad enough, in the process it was deemed NECESSARY by these morons, to essentially shred the Constitution & the Bill of Rights! To spy on the public to ''information mine'' NOT to protect America, but to accumulate intel about it''s citizens!

NO! Al Queda isn''t the threat to America and it wasn''t them that caused ALL these problems that they could only HOPE to achieve, instead it was the Republican party! They are responsible for the decline America is in, and now, they want to make it worse! And we see, just how much they hate America!

part 1

[tonysp2]

The financial meltdown is the scheme of George W. Bush, *** Cheney, John McCain, and the Republican Party to get rid of Social Security in the United States.

[stn_sage]

The workers will never be able to retire and will be forced to work McJobs until their 80 as long as Wallstreet greed exists, and who is going to stop them ? Not the republicans, they''''ll just keep handing over money and then put up walls to keep us out.

America has become a joke of a country, problem is the joke is not funny.

repubicans are a joke, and I have not one positve thought or nice thing to say to one. I dispise republicans as much as AL Quaida, there all worthy of the death sentence... every single one of you !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
!!!!!!!!!!

Posted by ddaryl1 at 11:56 AM : Sep 21, 2008
------------------
Don''t you worry brother, because you''re NOT alone!
Bush''s HUGE bailout of the CORPORATE WEALTHY has pushed and is pushing people toward your views regarding Republicans. If the economy tightens and/or collapses, we''ll have the second American Civil War!

It''ll be everyone against the Republicans!

[obsever2008]

Now is the time then to declare personal bankruptcy, that way everybody is helped by our own tax money.
Anyway, it looks like it is a make believe economy.Printing bills like there is no tomorrow.

[xzonz]

Sarah Pilan and her husband also drive cars with personalized number plates

[xzonz]

When you have seven homes, that''s a lot of garages to fill. After the fuss over the number of residences owned by the two presidential nominees, NEWSWEEK looked into the candidates'' cars. And based on public vehicle-registration records, here''s the score. John and Cindy McCain: 13. Barack and Michelle Obama: one.

(The McCain campaign did not respond to multiple requests for comment.)

Obama''s lone vehicle also is a green machine, a 2008 Ford Escape hybrid. He bought it last year to replace the family''s Chrysler 300C, a Hemi-powered sedan. Obama ditched the 300C, once 50 Cent''s preferred ride, after taking heat for driving a guzzler while haranguing Detroit about building more fuel-efficient cars.

McCain''s personal ride, a 2004 Cadillac CTS, is no gas sipper, but it should make Detroit happy because it''s made by General Motors. "I''ve bought American literally all my life and I''m proud," McCain said in the interview with Detroit''s WXYZ-TV. But the rest of his fleet is not all-American. There''s a 2005 Volkswagen convertible in the along .... The McCains also own three 2000 NEV Gem electric vehicles, which are bubble-shaped cars popular in retirement communities.

Only the Cadillac is registered in the candidate''s name. Cindy McCain''s name is on 11 vehicles, though not the one she actually drives. That car, a Lexus, is registered to her family''s beer-distributor business and is outfitted with personalized plates that read MS BUD.

) 2008