TEVE INSKEEP, Host:
It's Morning Edition from NPR News. I'm Steve Inskeep.
LINDA WERTHEIMER, Host:
And I'm Linda Wertheimer in for Renee Montagne. Treasury Secretary Henry Paulson and Fed Chairman Ben Bernanke are on Capitol Hill this morning trying to sell Congress on the $700 billion bailout plan for Wall Street. Secretary Paulson had this to say in his opening statement before the Senate Banking Committee.
(SOUNDBITE OF SENATE BANKING COMMITTEE HEARING)
HENRY PAULSON: This is a difficult period for the American people. I very much appreciate the fact that congressional leaders and the administration are working closely together so that we can help the American people by quickly enacting a program to stabilize our financial system.
WERTHEIMER: NPR's Brian Naylor is watching the proceedings at the Capitol, and he joins us now. Brian, how are the lawmakers responding to this call for a quick solution to stabilize the financial system?
BRIAN NAYLOR, Host:
Linda, there's a lot of skepticism, as you might imagine. A lot of, sometimes, hostility. I think that lawmakers on the one hand will acknowledge that something needs to be done to stem the tide of losses on Wall Street, but they are very reluctant to pass the burden on to taxpayers. This is interesting. This morning, it's the first time that a Senate or a congressional committee has met publically and asked questions of Paulson about this $700 billion proposal, and there's a lot of unknowns and a lot of head scratching going on.
WERTHEIMER: I was impressed with the opening statement from Senator Christopher Dodd who talked about this as being a calamity that was predictable and preventable.
NAYLOR: Well, right. And there's been a lot of criticism that the Fed has been kind of lurching from crisis to crisis. Here, let's listen to a little bit of what Senator Dodd had to say this morning.
(SOUNDBITE OF SENATE BANKING COMMITTEE HEARING)
CHRISTOPHER DODD: I understand speed is important, but I am far more interested in whether or not we get this right. There is no second act to this. There is no alternative idea out there with the resources available if this does not work.
NAYLOR: And so, you know, Democrats are trying to come up with their own alternative, their own second idea. It's going to probably be based on what Paulson has proposed. But, you know, Republicans are also very skeptical of this. I think while Democrats are kind of unified in the sense that they're going to get something done, there's a lot more hostility towards this plan from Republicans. For instance, here's what Richard Shelby, who is the top Republican on the Banking Committee, said in his opening remarks this morning.
(SOUNDBITE OF SENATE BANKING COMMITTEE HEARING)
RICHARD SHELBY: There are very few details in this legislation. In fact, Treasury officials admit that they will have to figure out the mechanics as they go along. Rather than establishing a comprehensive, workable plan for resolving this crisis, I believe this legislation merely codifies Treasury's ad hoc approach.
WERTHEIMER: It's interesting to me, Brian, that Shelby particularly - I mean, I know he opposes this idea - but Shelby talked - he attacked the administration. He basically said that you've been here testifying day in, day out, and nobody told us this was coming or it was going to be this bad.
NAYLOR: Yep, that's true. And I think that's the way a lot of lawmakers from both parties feel. You know, first there was the bailout of Fannie Mae and Freddie Mac, and then the bailout of AIG. And lawmakers keep being assured by the administration that the problem has been solved when in fact it hasn't been. And so they're kind of wondering, what are we in for now?
WERTHEIMER: Do you think the Congress is likely to give the Treasury much of what it wants, maybe plus some safeguards and plus some add-ons?
NAYLOR: Yeah, I think so. I think they - the administration has already agreed for more oversight of this proposal. At first they said, well, we'll come back to you with a report every six months or so. Democrats are insisting on more stringent oversight. And Democrats also want to see some limits on the salaries of the CEOs of these banks that are going to be getting these bailouts. I think the administration's probably going to have to go along with that as well.
WERTHEIMER: OK. NPR's Brian Naylor, get back to the hearing. Thank you.
NAYLOR: Thanks, Linda. Transcript provided by NPR, Copyright NPR.
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