You know that plan to rescue Fannie Mae and Freddie Mac that Hank Paulson & Co. have been working on for weeks? Lawmakers today are basically telling him to go back to the drawing board.
Paulson today went before the equivalent of the Special Executions Committee of the US government with the proposal he made Sunday afternoon. Paulson had proposed the Congress give him a blank check, basically letting the Treasury spend as much money as needed to prop up the floundering mortgage giants. Congress, however, jealously protects its spending power and gave Paulson a bipartisan Bronx cheer.
In interviews both the senior Democrat and Republican members of the Senate banking committee slapped down the proposal. “I’m uneasy about giving this blanket authority without having any kind of checks,” Senate Banking Committee Chairman Christopher Dodd said.
“I’ve never known Congress”‘ to give “an open-ended blank check for somebody to fill in,” ranking Republican Richard Shelby said.
Damned democratic institutions and their constitutional prerogatives. Always getting in the way of the best laid plans.
U.S. Lawmakers Balk at Paulson’s Fannie Mae, Freddie Mac Plan [Bloomberg]
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- Use the Bloomberg command
NH BLG_DEALBREAKER <GO>
to access Dealbreaker
no comment on the bazooka comment? juicy. maybe soros can break the bank again.
eastguest
bazookanomics
Don’t call me buddy, guy!
flounder: A small edible flat fish
founder: To stumble or fall; to fail or collapse
HTH. HAND.
@5:31 I was looking forward to that once I saw the headline.
Am I the only one cynical enough to think that Paulson knew Congress wouldn’t write him a blank check (and that if he didn’t, I’m still glad there isn’t a new fourth branch of government)? Fannie/Freddie got two days’ breathing room and if the shareholders end up being taken out and shot it’s the fault of Congress. Pretty slick, if he planned it.
This has election-year grandstanding written all over it. “Look at that Democrat Congress, they’re at it again! We’re trying to save the economy, and they are stopping us! Whhhaaaaa! Whaaaaaa!”
This has been a theme for a while now with the White Haus.
Can anyone in government seriously believe that Congress is going to hand them a blank check? Huge party battles are fought over nuances of budgeting. What has Paulson learned in his time in government? Paulson wants to have a bazooka in his pocket? We don’t need armed and dangerous Treasury secretaries.
Okay, I qualify my other assertion that Congress will give the Fed whatever it wants to aid in blaming it later. Whatever it wants that does not involve actual money. That could be better spent building bridges in Alaska or making shrines out of Laurence Welk’s boyhood home or something like that. Anything but that.
M