COX Newspapers Washington Bureau

Home > Window on Washington > Archives > 2008 > September > 29

Monday, September 29, 2008

Paulson meets with Bush

By Ken Herman | Monday, September 29, 2008, 05:00 PM

Treasury Secretary Henry Paulson outside West Wing after discussions with President Bush in the wake of House rejection of the administration-supported economic bailout package.

Video above.

Text below.

-

PAULSON: I’m very disappointed in today’s vote, but leaders on both sides of the aisle have worked very hard. I’ve spoken to them, and I know they share my great disappointment. We’ve experienced significant turmoil in our financial markets in the last few days, including the collapse of Washington Mutual and Wachovia here and the failure of two major financial institutions in Europe.

Markets around the world are under stress, and that reduces the availability of credit that businesses across America depend on to meet payroll and to purchase inventories.

Families, too, feel the credit crunch, as it becomes more difficult to get car loans or a student loan.

I and my colleagues at the Fed and the SEC continue to address the market challenges we are facing on a daily basis. I am committed to continue to work with my fellow regulators to use all the tools available to protect our financial system and our economy.

Our toolkit is substantial, but insufficient. Therefore, I will continue to work with congressional leaders to find a way forward to pass a comprehensive plan to stabilize our financial system and protect the American people by limiting the prospects of further deterioration in our economy.

We’ve got much work to do, and this is much too important to simply let fail.

QUESTION: How long do you estimate it will take, if there is still no congressional action, before the country starts to slip into what the president calls a long and painful recession?

PAULSON: Well, we need to work as quickly as possible. We need to get something done. And I’m going to be continuing to consult with congressional leaders to find the way forward to get something done as soon as possible. We need to get something done.

QUESTION: Do you still think you can put something close to your original plan back together?

PAULSON: We need to put something back together that works. And as you’ve heard me say, we believe that our plan and the plan that we developed with the congressional leaders and worked so hard is a plan that works. And we need a plan that works.

QUESTION: How soon do you need it, sir?

PAULSON: We need it as soon as possible. And we’re just committed to working with congressional leaders to get it done.

QUESTION: What would you like to see?

PAULSON: We had a plan that we’d worked very hard on that did the job, gave us the tools we needed to protect the financial markets, to protect the American people.

So where we go from here is something we’re going to be working on with congressional leaders, because we need to get something done, and we’re going to be working hard on it.

One more question.

QUESTION: Is the banking system able to withstand this stress it’s under right now?

PAULSON: Our banking system has been holding up very well, considering all of the pressures, and there’s been a lot of work that’s been done.

And you’ve seen us now for a period of months and weeks taking strong actions and actions that are essential in order to protect the banking system and the economy.

And as I’ve said to you, we have significant tools in our toolkit, but they’re not sufficient. And so we’re going to continue to work with what we have until we get from Congress what we need.

Thank you very much.

Permalink | Comments (0) | Post your comment |

All seven Georgia Republicans reject bailout plan

By Julia Malone | Monday, September 29, 2008, 02:55 PM

WASHINGTON—All seven of Georgia’s Republican House members joined all but two of the Democrats Monday in voting against the Bush administration’s $700 billion plan to shore up the nation’s financial markets.

Rep. Jim Marshall of Macon, a Democrat who said he was willing to back the unpopular package even if it meant losing his seat in November, joined Rep. Sanford Bishop, D-Albany, in voting yes.

The proposal went down by a surprise 228-205 margin after Republicans refused to back their party leadership.

“Our leadership weren’t elected by the people of our districts,” said Rep. Phil Gingrey, R-Marietta, who received a call from the Republican House leaders a few minutes before he voted against the proposal.

Gingrey and the other Georgia lawmakers have received a torrent of emails and phone calls from angry voters urging them to oppose what many considered a taxpayers’ bailout for firms that were guilty of greed or worse.

Rep. Tom Price, R-Roswell, blamed a “lack of leadership” by House Speaker Nancy Pelosi, D-Calif., for the failure to pass a rescue plan. Price said it would have received “overwhelming support” if it had included more protections for taxpayers, embraced private enterprise solutions and had a clear “exit” policy for ending the program.

Price said he expected the House would try again “later this week.” The House adjourned for the Jewish new year’s holiday but could be recalled at any time by the speaker.

Permalink | Comments (0) | Post your comment |

Georgia Republicans plan ‘no’ vote on bailout

By Julia Malone | Monday, September 29, 2008, 11:19 AM

With the world and their constituents waiting to see how lawmakers would vote on the $700 billion bailout bill for the financial markets, Georgia Republicans in the House were poised Monday to “just say no” to their party leaders and the president.

After a meeting Sunday evening in the office of Rep. Phil Gringrey of Marietta, aides said the members were leaning heavily against the bailout. Rep. Lynn Westmoreland of Grantville took the House floor Monday morning to denounce the bill as too rushed.

“You cannot do this type of buyout — bailout of $700 billion without adequate hearings, without hearing other alternatives,” Westmoreland said.

Permalink | Comments (0) | Post your comment |

Bush on bailout

By Ken Herman | Monday, September 29, 2008, 08:18 AM

Above: Amid the clatter of cameras at the White House, President Bush pitches the economic bailout bill.

Below: The transcript, not including the questions he ignored (see video above to hear them):

Good morning. Yesterday, leaders here in Washington reached an extraordinary agreement to deal with an extraordinary problem in our economy. Working closely with my administration, congressional leaders from both parties produced the Emergency Economic Stabilization Act - a bold bill that will help keep the crisis in our financial system from spreading throughout our economy.

This legislation deals with complex issues, and negotiators were asked to address them in a very short period of time. I appreciate the leadership of members on both sides of the aisle, who came together when our nation was counting on them. Negotiations are sometimes difficult, but their hard work and cooperation paid off.

The bipartisan economic rescue plan addresses the root cause of the financial crisis - the assets related to home mortgages that have lost value during the housing decline. Under the Emergency Economic Stabilization Act, the federal government will be authorized to purchase these assets from banks and other financial institutions, which will help free them to resume lending to businesses and consumers.

The bill also includes other important ideas put forward by members of Congress from both parties. For example, the bill requires the establishment of a guarantee program that will insure assets at no cost to the taxpayer. The bill provides strong, bipartisan oversight so Americans can be certain that their tax dollars are used carefully and wisely. The bill ensures that failed executives do not receive a windfall from your tax dollars.

With this strong and decisive legislation, we will help restart the flow of credit, so American families can meet their daily needs and American businesses can make purchases, ship goods, and meet their payrolls. We’ll make clear that the United States is serious about restoring confidence and stability in our financial system.

I know many Americans are worried about the cost of the bill, and I understand their concern. This bill commits up to 700 billion taxpayer dollars, because a large amount of money is necessary to have an impact on our financial system. However, both the non-partisan Congressional Budget Office and the Office of Management and Budget expect that the ultimate cost to the taxpayer will be far less than that. In fact, we expect that over time, much - if not all - of the tax dollars we invest will be paid back.

Now that this legislation has been agreed to by leaders of both parties, it must be passed by houses - both houses of Congress. And I fully understand that this will be a difficult vote. But with the improvements made to this bill, I’m confident that members of both parties will support it. Congress can send a strong signal to markets at home and abroad by passing this bill promptly. Every member of Congress and every American should keep in mind: A vote for this bill is a vote to prevent economic damage to you and your community.

This has been a volatile time for our financial system and our economy. Even with the important steps we’re taking to address the current crisis, we will continue to face serious challenges. The impact of the credit crisis and the housing correction will continue to pressure our financial system and impact the growth of our economy for some time. But I’m confident that this rescue plan - along with other measures taken by the Treasury Department and the Federal Reserve - will begin to restore strength and stability to America’s financial system and overall economy. And I’m confident that in the long run, America will overcome these challenges and remain the most dynamic and productive economy in the world.

Thank you.

Permalink | Comments (0) | Post your comment |