Paulson defends bailout plan to Congress

"All of us should be angry," said Treasury Secretary Henry Paulson at a hearing before the House Financial Services Committee. He said that the keys to this "disaster" were housing prices and borrowed money. He said that both corporations and homebuyers are guilty of bad financial maneuvers that allowed for this bailout to be needed.

Federal Reserve Chairman Ben Bernanke said that if we do not bail out these companies quickly, we would see increasing unemployment, higher numbers of foreclosures, and fewer available jobs. Referring to the cost of the bailout, Bernanke said that this bailout would cost "much less than 700 billion dollars," and he said that the cost to the taxpayers is smaller now than it could be later if the bailout is not done now.

Rep. Chris Ackerman (D-N.Y.) echoed the sentiments of many congressmen saying "I don't see [in Treasury Secretary Henry Paulson's proposal] any protection to stop us from having this problem again." Rep. Luis Gutierrez (D-Ill.) said he did not feel comfortable paying for this plan with taxpayer money while high ranking officials of these bankrupt institutions were "lining their pockets" along with their companies.

Schumer says bailout is unfair to taxpayers, but must be done

Sen. Chuck Schumer (D-N.Y.) says that while it isn't fair for the taxpayers to bare the cost of corportations' mishaps, it's the only way out of our hole. (1:12)

White House Gaggle

Briefer: Dana Perino

President’s Schedule:

President Bush had his normal briefings at 8 am this morning. At 11 am the President will make a statement on the 10th Anniversary of the International Religious Freedom Act, in the Roosevelt Room of the White House. At 1.30 pm, the President will make a statement in the Rose Garden on the energy needs of the country, and the importance of expanding exploration for resources here at home. The President will announce that he has decided to lift the executive ban on oil exploration in America’s outer continental shelf, and he will again call on Congress to lift its legislative ban.
Perino also made remarks about the news of former Press Secretary Tony Snow who passed away on Saturday. She thanks everyone on behalf of the Snow family for the outpour of support, and quoted the President: “Tony Snow was a great friend to everybody at the White House. “ Perino also announced the funeral services for Thursday July 17, 2008 to be held at 10 am at the Basilica at Catholic University. The President will be attending this service.

Oil Exploration

When asked about what effect lifting the ban will really have, Perino went back to June 18th when the President called upon Congress to come together in finding solutions, “to turn both keys at the same time”, as Perino described it. She talked about the Democratic leaders in Congress who have not shown a willingness to move forward. “They haven’t even held a single hearing,“ Perino said. The White House is now hoping that lifting the ban, will help spur Congress to act. Both the legislative and the executive ban need to be lifted in order to them to be able to move forward and develop more sources of oil in our own country. Perino said that they are aware that it is going to take some time; there is no quick fix, but that we are in a transitional period that requires action. “The sooner they act the sooner, the faster we can send a signal to the market that we are serious, “ she said
When asked if lifting the executive ban in itself does anything, Perino said that it doesn’t; Congress has to act as well.

Perino was asked to go over what the White House position is on what Democrats are saying in terms of the oil fields that are already available to oil companies off shore; in her response she to the “Use it or lose it” provision, she referred to the oil companies and what they have to go through from the time they get a lease through permits and other ordeals in order to see if there is any existing oil all in the ground. “ It doesn’t make economic sense to think that anyone is sitting on extra oil that they have right now, that they could be selling, “ Perino said.

Perino was asked questions in regards to Treasury Secretary Paulson who made a statement yesterday about expanding credit, and if this is propping up share prices for Freddie Mac and Fannie Mae, that could put taxpayers money at risk; and she said that the announcements yesterday talked about actions that are being taken to prevent any taxpayers money to be at stake. Perino also stated that neither of the companies has taken advantage of the borrowing opportunities and both of their regulators have stated that the companies are well capitalized, so “this is sending message to what is a nervous market that the government will be there if it is needed.” Perino continued to say that the Administration believes that these should continue to be shareholder owned companies and “we hope that the action Secretary Paulson took yesterday will be quickly taken up by Congress.”

Housing Bill

When asked if the White House needs to drop any objections in order to speed up the process for the bill to pass, Perino said that they feel that they are in a good position the way it is. Perino also mentioned a key of the Senate bill where it calls for an independent regulator at the GSE something that the President has been calling for since years back. She said that the Administration got good feedback from members of Congress yesterday so they have hopes that it will get done quickly.

Senate Committee on Finance Questions Secretary of Treasury Henry Paulson About President's 2009 Budget Proposal

In this morning's Senate Committee on Finance hearing chaired by Senator Max Baucus (D-MT), Secretary of the Treasury Henry Paulson was questioned about President Bush's fiscal year 2009 budget proposal. The Committee's questions were concerned primarily with Paulson and Bush's stimulus proposal and their plans for avoiding economic recession in both the immediate and long term future.

Baucus emphasized that the President's hope for a projected surplus by 2012 was "unrealistic." The Senator went on to caution that the budget's calls for Medicare and Medicaid spending cuts would be "devastating" to many dependent on the programs, including seniors, people with disabilities, and children. Baucus spoke out against the budget plans to further cut taxes.

Secretary Paulson's defense was that he believed our economy could not handle anything that would further increase taxes. He reminded the Committee that the Bush Administration was succeeding with programs such as the HOPE NOW alliance. Paulson added he had "great confidence" in the ability of our market to recover from this difficult time.

Paulson and the Bush Administration want to see a plan implemented that is "robust, temporary, and broad-based." While arguing philosophically about the best way to move our economy in the right direction, all present at the hearing were in agreement that what our government is doing now to help America is not working efficiently enough.