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Lawmakers Renew Talks on Rescue Plan Amid Signals of Compromise
By Alison Vekshin and James Rowley
Sept. 27 (Bloomberg) -- House Republican lawmakers today are set to resume participation in talks on a $700 billion rescue plan for the U.S. financial system, giving new momentum to forge an agreement.
House Minority Leader John Boehner said that House Republicans will join the talks scheduled for today, while warning that his party's lawmakers won't agree to a bill that ``sells taxpayers out to bail out Wall Street.''
Republican lawmakers this week offered a plan calling for Wall Street firms to purchase insurance on mortgage-backed securities and advocating tax cuts and relaxed regulations. They objected to a rescue proposal put forward by Treasury Secretary Henry Paulson, derailing an agreement on the outline of a deal that had been reached by the administration, Democrats and Senate Republicans.
President George W. Bush and Senate Democratic and Republican leaders said yesterday that lawmakers could reach an agreement within days.
``We are going to get a package passed,'' Bush said.
Congressional negotiators said talks would start on the original plan that was agreed to this week by Senate negotiators and the administration, including authorization for an immediate expenditure of $250 billion for the Treasury to buy distressed debt securities plus another $100 billion at the government's disposal. Another $350 billion could be spent to buy troubled assets unless Congress specifically acts to bar that authority.
Equity Stakes
Other elements agreed to by the administration include restrictions on executive compensation by participating financial firms. House Financial Services Committee Chairman Barney Frank said that Paulson had agreed to equity stakes for taxpayers in the companies through warrants. Frank said the Republican insurance plan was also ``an option.''
Treasury officials had previously rejected a plan focusing on insurance in favor of one that purchased troubled assets. Yet Ed Gillespie, a senior Bush adviser, said some of the Republican proposals ``can be accommodated, possibly.'' Bush will rely on the recommendations from Paulson and Federal Reserve Chairman Ben S. Bernanke to determine whether the modifications are workable.
``We look at everything through a prism of `will it work' and `can we get it done,' and if it meets those two tests, then we'll be for it,'' Gillespie said.
Vote Coming Soon
Senate Majority Leader Harry Reid, a Nevada Democrat, said an agreement may be drawn up today and a vote held ``this Sunday or Monday.''
Formal talks between House and Senate Republicans, administration officials and congressional Democrats were postponed yesterday because of a scheduling conflict.
``We are still very optimistic that an agreement can be reached,'' said Senate Banking Committee Chairman Christopher Dodd, a Connecticut Democrat.
Frank said that ``it doesn't sound like'' House Republicans want to scrap the Treasury Department's bailout plan.
``The Republican staff is now joining the negotiations and it does look like they're ready to help work on this thing,'' he told reporters. ``They came to a meeting in which we were negotiating on the Paulson plan'' and ``it would not have made sense to do that if you were against the plan.''
Shelby Shifts
In a further sign the deadlock is easing, Alabama Senator Richard Shelby, the top Republican on the Senate Banking Committee, said he had reconsidered his decision to try to block a bailout package.
``I know politics, I read the tea leaves,'' Shelby told reporters outside the Senate chamber. ``There's going to be a deal here if there's any way to do it and it's not going to be, I believe, in the best interest of the American people.''
Boehner said he would send House Republican Whip Roy Blunt of Missouri as his lead negotiator.
The uncertainty over the rescue package was exacerbated by the government's announcement of the takeover of Washington Mutual Inc., the largest U.S. savings-and-loan institution. Gregg said market conditions forced House Republicans to show more willingness to engage in discussions.
``Anybody who got up this morning and looked at the market, especially the credit markets, had to take a deep breath and say, `This is serious. We better do something,''' he said yesterday.
In a statement sent to congressional leaders, former Fed Chairman Alan Greenspan, former Secretary of Treasury and State George Shultz and Robert Hall, a senior fellow at the Hoover Institution, urged Congress to take action quickly or risk further market turmoil.
``We urgently advocate immediate, extensive action that would maintain the functions of credit markets and prevent a serious economic contraction,'' they wrote. ``The only way that financial institutions can continue to function is for the government to provide financial support.''
To contact the reporters on this story: Alison Vekshin in Washington at [email protected]; James Rowley in Washington at [email protected]
Last Updated: September 27, 2008 01:13 EDT
Lawmakers Renew Talks on Rescue Plan Amid Signals of Compromise
By Alison Vekshin and James Rowley
Sept. 27 (Bloomberg) -- House Republican lawmakers today are set to resume participation in talks on a $700 billion rescue plan for the U.S. financial system, giving new momentum to forge an agreement.
House Minority Leader John Boehner said that House Republicans will join the talks scheduled for today, while warning that his party's lawmakers won't agree to a bill that ``sells taxpayers out to bail out Wall Street.''
Republican lawmakers this week offered a plan calling for Wall Street firms to purchase insurance on mortgage-backed securities and advocating tax cuts and relaxed regulations. They objected to a rescue proposal put forward by Treasury Secretary Henry Paulson, derailing an agreement on the outline of a deal that had been reached by the administration, Democrats and Senate Republicans.
President George W. Bush and Senate Democratic and Republican leaders said yesterday that lawmakers could reach an agreement within days.
``We are going to get a package passed,'' Bush said.
Congressional negotiators said talks would start on the original plan that was agreed to this week by Senate negotiators and the administration, including authorization for an immediate expenditure of $250 billion for the Treasury to buy distressed debt securities plus another $100 billion at the government's disposal. Another $350 billion could be spent to buy troubled assets unless Congress specifically acts to bar that authority.
Equity Stakes
Other elements agreed to by the administration include restrictions on executive compensation by participating financial firms. House Financial Services Committee Chairman Barney Frank said that Paulson had agreed to equity stakes for taxpayers in the companies through warrants. Frank said the Republican insurance plan was also ``an option.''
Treasury officials had previously rejected a plan focusing on insurance in favor of one that purchased troubled assets. Yet Ed Gillespie, a senior Bush adviser, said some of the Republican proposals ``can be accommodated, possibly.'' Bush will rely on the recommendations from Paulson and Federal Reserve Chairman Ben S. Bernanke to determine whether the modifications are workable.
``We look at everything through a prism of `will it work' and `can we get it done,' and if it meets those two tests, then we'll be for it,'' Gillespie said.
Vote Coming Soon
Senate Majority Leader Harry Reid, a Nevada Democrat, said an agreement may be drawn up today and a vote held ``this Sunday or Monday.''
Formal talks between House and Senate Republicans, administration officials and congressional Democrats were postponed yesterday because of a scheduling conflict.
``We are still very optimistic that an agreement can be reached,'' said Senate Banking Committee Chairman Christopher Dodd, a Connecticut Democrat.
Frank said that ``it doesn't sound like'' House Republicans want to scrap the Treasury Department's bailout plan.
``The Republican staff is now joining the negotiations and it does look like they're ready to help work on this thing,'' he told reporters. ``They came to a meeting in which we were negotiating on the Paulson plan'' and ``it would not have made sense to do that if you were against the plan.''
Shelby Shifts
In a further sign the deadlock is easing, Alabama Senator Richard Shelby, the top Republican on the Senate Banking Committee, said he had reconsidered his decision to try to block a bailout package.
``I know politics, I read the tea leaves,'' Shelby told reporters outside the Senate chamber. ``There's going to be a deal here if there's any way to do it and it's not going to be, I believe, in the best interest of the American people.''
Boehner said he would send House Republican Whip Roy Blunt of Missouri as his lead negotiator.
The uncertainty over the rescue package was exacerbated by the government's announcement of the takeover of Washington Mutual Inc., the largest U.S. savings-and-loan institution. Gregg said market conditions forced House Republicans to show more willingness to engage in discussions.
``Anybody who got up this morning and looked at the market, especially the credit markets, had to take a deep breath and say, `This is serious. We better do something,''' he said yesterday.
In a statement sent to congressional leaders, former Fed Chairman Alan Greenspan, former Secretary of Treasury and State George Shultz and Robert Hall, a senior fellow at the Hoover Institution, urged Congress to take action quickly or risk further market turmoil.
``We urgently advocate immediate, extensive action that would maintain the functions of credit markets and prevent a serious economic contraction,'' they wrote. ``The only way that financial institutions can continue to function is for the government to provide financial support.''
To contact the reporters on this story: Alison Vekshin in Washington at [email protected]; James Rowley in Washington at [email protected]
Last Updated: September 27, 2008 01:13 EDT
