$700B Bailout Plan Won't Rescue CEOs

(CBS/ AP)  President Bush readied a prime time speech to the nation and Treasury Secretary Henry Paulson accepted a major change in legislation for a $700 billion bailout of the financial industry on Wednesday as the administration scrambled to prevent further deterioration in the economy.

Republican officials said that Paulson had bowed to demands from critics in both parties to limit the pay packages of executives whose companies benefit from the proposed bailout. They spoke on condition of anonymity because Paulson's decision had not been formally announced.

White House officials said Bush's speech would dwell on the financial crisis.

Press secretary Dana Perino said the president wants to tell the American people how the crisis affects them and help them understand the depth of the problem.

The developments came as the administration sought to overcome obstacles in Congress to speedy enactment of an unprecedented government bailout of the beleaguered financial industry.

Federal Reserve Chairman Ben Bernanke told Congress on Tuesday that failure to act quickly could trigger deepening in the credit crisis that would lead to a recession, with rising unemployment and increased home foreclosures.

Appearing before lawmakers for the second day in a row, he added on Wednesday that global financial markets are under "extraordinary stress."

Paulson, who with Bernanke heard withering criticism of the bailout plan on Tuesday, met for the second consecutive day with House Republicans, some of whom have announced their opposition to any federal bailout of the private financial markets that form the backbone of American capitalism.

Other Republicans appear to be more open to legislation, according to congressional and administration officials, although on different terms than the White House proposed last weekend.

Majority Democrats have also criticized the administration's legislation, demanding major changes. At the same time, they have stressed they stand ready to work with the White House to head off an economic catastrophe.

House Speaker Nancy Pelosi met with administration officials to discuss the legislation, and told reporters later, "we're moving in a productive direction." She declined to discuss specifics.

Amid speculation that votes on any legislation could slip into next week, she said, "We'll finish it when it's ready. I'd rather it be sooner rather than later."

Numerous Democrats have said privately in recent days they are wary of voting for the administration's proposed legislation without significant Republican support.

But so far, there was little evidence of support within the GOP rank and file.

"It's a tough sell to most of our members," said Rep. Tom Davis, R-Virginia, after a closed-door meeting with Paulson and Bernanke. "It's a terrible plan, but I haven't heard anything better."

Compounding the administraiton's challenge, Republicans and Democrats both say Bush has lost credibility, particularly in cases where he argues there will be dire consequences if Congress doesn't act.

"They sold the war, they sold the stimulus package and some other things. It's the 'wolf at the door' " argument, Davis said.

The presidential campaign added yet another layer of complexity.

Some Democrats expressed concern that they would side with an unpopular Presidnet Bush, only to have Republican presidential candidate John McCain oppose the measure and try to ride his opposition to victory over Barack Obama.

So far, neither McCain nor Obama has indicated how they would vote on the measure.

Paulson has been negotiating for days with Democrats over the details of the legislation, and while his acceptance of some limitation on so-called "Golden Parachutes" for departing executives removed one obstacle, others remained.

Democrats have called for greater protection for taxpayers, possibly by requiring that the government receive partial ownership - and a share of future profits - of companies that accept help through the proposed bailout.

Additionally, they want to allow bankruptcy judges to rewrite mortgages to ease the burden on consumers who are facing foreclosure.

Another demand, for provisions that give Congress greater authority over the bailout, have already been accepted in principle.

For their part, some Republicans have called for a suspension of the capital gains tax to free money for investment.

Law enforcement officials, meanwhile, said Tuesday that the FBI was investigating four major U.S. financial institutions whose collapse helped trigger the bailout plan. In all, 26 high-profile companies are under intense scrutiny, reports CBS News correspondent Bob Orr.

[enriquecaliente]

Let us not stand in the way of history, lets get 4 more years of Republitard rule and go the way of the doe-doe bird.

[jd2408]

I don''t feel our Congress or Wall Street are capable of using this money wisely and efficiently. I am sorry to say I don''t trust either one of them.

[edthelight]

CAP the pay of CEO''s to 40 times the pay of the lowest paid employee of the company. Any benefits or compensation above this tax at 60%.

The BAILOUT is not needed or invest the 700 billion into alternate energy, infrastructure, or refund to the American Taxpayer and see the results of tickle-up economics.

[inventagod2]

Greed and Sloppiness

Previous gifts I have granted Big Business:

Franklin National Bank 1974 $7.7 billion
Chrysler 1980 $3.9 billion
Continental Illinois National Bank and Trust Company 1984 $9.5 billion
Savings & Loan 1989 $293.8 billion
Bear Stearns 2008 $30 billion
Fannie Mae / Freddie Mac 2008 $200 billion
American International Group (A.I.G.) 2008 $85 billion

Fat@ss greedy slobs needing a handout?
AGAIN?

[obamaslady]

Is there any means of "opting out" of this ''rotten to the core'' plan? And they have to ask why the poor get poorer! With the Bush regime''s push and their rush to sell this stink bomb to us, the rich continue to get richer so I want to know precisely who is benefiting from my portion of this bailout because I suspect they are wealthy enough to pay for it from their own greedy pockets! This is an outrage and grossly unfair to the taxpayers!!!

And don''t forget that McSame now wants us all to believe that he has now [over the past week] changed his core beliefs and is a REGULATOR. And if anyone believes this, I have a bridge to nowhere I want to sell! What did the congress believe would happen with virtually no REGULATION OR ACCOUNTABILITY? Did they actually believe they would self-regulate? I thought these officials were supposed to be more intelligent than the rest of us, so how could they believe this BS? I am LIVID! This is so wrong!

[whitemale08]

HEY WALL STREET....WE''RE NOT BUYING THIS KRAP!!!!!

I won''t to see every yacht sold, I want to see Donald Trump in the soup lines before we give you guys ONE DA** PENNY!!!!!!!!!!!

HELL NO!!!! THE CONSTITUTION SAYS NO BAILOUTS!!!!!

[marym23]

This is way too big to trust to Congress. Why not just let the people vote on the bailout, one way or the other? You remember the concept of government "by the people", don''t you? Yes, it would delay things a bit, but that would be a good thing. I hate Paulson and Bernanke''s DEMAND to spend $700 NOW, without taking the time to think about it.

[bm6005]

Are you aware that most Wall Street execs are Democrats?

Posted by whatwhy001

I''ve already seen other responses but I just have to know: what''s your source? I left one in my toilet today also!!

[habu99-2009]

the Atomic bomb was built with the Help of Nazi''''s

Posted by shado269 at 11:08 AM : Sep 24, 2008

While I share your sentiment that the neoCONS are swine, I don''t think the atomic bomb statement is accurate. The Manhattan Project''s success was all due to the team of scientists we had assembled. Most of those scientists were Jews or of Jewish descent who fled Hitler''s Europe to escape a near certain death in the camps. Einstein, Fermi, Szilard, Teller, etc would not have done the work they did if there were overt or covert sympathizers to National Socialism and Hitler in their midst, nor would the US government have allowed anyone with any shred of Nazi sentiment near the project as the ultimate enemy at the time were Nazi scientists who we thought were also developing an atomic bomb and with whom we were in a race to finish first.

[pastdue1]

The Bush administration has reduced subsidized lunch programs in schools as it being too expensive, yet can easily expect seven hundred billion plus additional dollars to bailout the bad decisions and money rich corporations.
Posted by yongamerica at 11:20 AM : Sep 24, 2008

That has been the defining trademark of the Bush administration. It has consistently decried any appropriation for anything that is American, even the appropriations for the vets returning from Iraq, but continues to advance more appropriations for the rebuilding of Iraq and Georgia(look carefully at McCain''s association with the president of Georgia and why he announced that "we are all Georgians".
Interesting note that shows palin has the same mind set. When Congress stopped the "bridge to nowhere", Tom Coburn, OK-R, advised that Alaska return the money to help with the reconstruction in New Orleans after Katrina, instead palin''s administration kept it and used some of the money to build the "road to nowhere" 3 miles of gravel road costing $8,000,000per mile.