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Market Bailout Irks Congress

MICHELE NORRIS, host:

From NPR News, this is All Things Considered, I'm Michele Norris. Some key members of Congress will be working this weekend. They'll be drafting legislation to implement Treasury Secretary Henry Paulson's proposal to buy up the bad debt he says is clogging our financial system. While lawmakers of the Bush administration seem to be working together now, that was not always the case. Just a few days ago, members of Congress complained they were being left in the dark. NPR's Brian Naylor reports.

BRIAN NAYLOR: It's been a whirlwind week for Wall Street and Congress. On Monday, lawmakers found out about the collapse of Lehman Brothers and the sale of Merrill Lynch. Then came the Federal Reserve board's bailout of insurance giant, AIG. Lawmakers were informed after the fact about those actions and weren't happy about it. Treasury Secretary Henry Paulson compounded their ire when he failed to appear before a Senate committee as expected and skipped the meeting of House Republicans. Now, the administration wants hundreds of billions of dollars to buy banks' bad debt and needs to come to Congress for authority. So Senate Banking Committee chairman Christopher Dodd of Connecticut says it's to keep lawmakers in the loop.

Senator CHRISTOPHER DODD (Democrat, Connecticut; Chairman, Senate Banking Committee): We welcome the administration coming forward with their ideas. We want to be a part of that solution. We want to know the details of it. I'm going to be asking the Treasury Department to inform my colleagues, Democrats and Republicans, over the weekend, so we're not confronted with a fait accompli on Monday or Tuesday.

NAYLOR: The administration seems to have gotten the message. Paulson and Fed Chairman Ben Bernanke briefed congressional leaders last night in Speaker Nancy Pelosi's office, and both men are expected before congressional committees next week. On the hill there's even talk of bipartisanship. All the more surprising because elections are just a month and a half away. Democratic senator Charles Schumer of New York sat in on last night's meeting. He says it was sobering.

Senator CHARLES SCHUMER (Democrat, New York): The picture they painted, if nothing was done, was really troubling - deeply, deeply, troubling. ..TEXT: NAYLOR: While lawmakers appeared genuinely shaken by the magnitude of Wall Street's crisis. The lack of a specific plan at the moment makes it easier for both parties to pledge support. Some Republican conservatives have expressed skepticism, if not hostility, to the administration's interventions in the markets this week. But House Republican Whip Roy Blunt said it's possible something could be worked out that makes almost everyone happy.

Representative WHIP ROY BLUNT (Republican, Missouri): We want to do the best thing for taxpayers, the best thing for pension funds, the best thing for mom and pop businesses, the best thing for people who have a mortgage that they're concerned about. And I think there's a way we can do that.

NAYLOR: Democrat Dodd says any solution must also deal with the underlying cause of the turmoil - all those mortgages that are leading to record numbers of defaults and foreclosures. Democrats also want a guarantee that middle-class Americans will be insulated from crisis on Wall Street. Speaker Pelosi has also indicated Democrats may have a price tag. Things like extended unemployment benefits and more money for roads and bridges before they approve the administration's next round of bailouts. Brian Naylor, NPR News, the Capital. Transcript provided by NPR, Copyright NPR.

NPR transcripts are created on a rush deadline by an NPR contractor. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.

NPR News' Brian Naylor is a correspondent on the Washington Desk. In this role, he covers politics and federal agencies.