U.S. Democrats call for more regulation, homeowner aid in bailout
Last Updated: Monday, September 22, 2008 | 2:48 PM ET
The Associated Press
Additional government aid for homeowners and enhanced regulatory measures must be included in legislation providing a $700 billion bailout for the U.S. financial system, Senate Democrats said on Monday.
A draft of the Democrats' plan obtained Monday by the Associated Press shows that Senate banking committee chairman Chris Dodd also wants the government to get a stake in the companies helped by the unprecedented rescue.
The measure would give the government the power it has requested to buy up bad mortgage-related assets that have been dragging down financial companies. But it would end the program at the end of next year, instead of creating the two-year initiative that the Bush administration has sought.
It also would add layers of congressional oversight, including an emergency board to keep an eye on the program with two House and Senate appointees.
Asked about Democrats' demands, Treasury spokeswoman Brookly McLaughlin said, "There are lots of issues, but the discussions we are having are good."
Asked if the negotiations could slow down passage of the measure, she said, "We are confident that we can get a bill done this week."
U.S. Treasury Secretary Henry Paulson has proposed buying up to $700 billion in bad debt linked to the dramatic decline of the U.S. housing market.
Congressional aides said the House could act on a bailout bill as early as Wednesday. President George W. Bush earlier Monday issued a statement saying "the whole world is watching" how the U.S. government moves on the legislation that has come in response to business turmoil that has roiled markets at home and abroad.
Republican Presidential candidate John McCain said Monday on NBC's Today show that "we are in the most serious crisis since World War II."
His comments come just a week after the Arizona senator described the U.S. economy as fundamentally sound. He also said on Monday that despite the ballooning national debt he would not raise taxes if elected president.
McCain said "history shows us that if you raise people's taxes in tough economic times that makes problems worse."
