Bernanke, Paulson Again Make Case For Bailout
MICHELE NORRIS, host:
From NPR News, this is All Things Considered. I'm Michele Norris.
MELISSA BLOCK, host:
And I'm Melissa Block. The Wall Street bailout plan gripped the Capitol today. At this hour, President Bush is addressing the nation. Congressional negotiators met behind closed doors today. And John McCain said he was putting his presidential campaign on hold to return to Washington and work on a resolution to the financial crisis. More on that later this hour.
NORRIS: And Henry Paulson and Ben Bernanke were back on the congressional barbecue. This time, the Treasury secretary and Fed chairman took a seat on the House side to try to convince skeptical lawmakers to quickly approve the Bush administration's $700 billion bailout plan. NPR's Brian Naylor joins us now from Capitol Hill. Hello, Brian.
BRIAN NAYLOR: Hi, Michele.
NORRIS: So, we'll get to the hearing in a moment. But first, what do you know about these closed-door negotiations?
NAYLOR: Well, there's been a lot of activity. Speaker Nancy Pelosi met this morning with Treasury Secretary Paulson and House Majority Leader John Boehner. Paulson briefed members of the House Republican Caucus, who've been very vocal in their opposition to the bailout plan. Barney Frank, the chairman of the House Financial Services Committee, and Chris Dodd, chairman of the Senate Banking Committee, and their staffs have been meeting. And there's word that there has been some progress on a couple of key issues.
NORRIS: One of the key issues, I understand, is this question of whether there will be a cap on executive compensation.
NAYLOR: Exactly. You know, there's a growing sense on both sides of the aisle that the Wall Street CEOs who've been making these multimillion dollar salaries and bonuses shouldn't continue to reap the rewards while taxpayers are asked to foot the bill for their mistakes. And today, for the first time, the administration agreed. Here's what Treasury Secretary Paulson said this afternoon.
Secretary HENRY PAULSON (Treasury Department): The American people are angry about executive compensation, and rightfully so. Many of you cite this as a serious problem, and I agree. We must find a way to address this in the legislation, but without undermining the effectiveness of this program.
NAYLOR: You'll notice that Paulson left things kind of vague on that point. It's not clear exactly what they're going to do. There has also been a lot of lawmakers who were worried that Paulson or his successor will get too much power under this bailout. And so there's been an agreement there will be some kind of an oversight board, along with regular reports to Congress and audits, and that sort of thing.
NORRIS: As they add these things to the bill - the oversight, the compensation, perhaps other things - are lawmakers more likely to come on board?
NAYLOR: Well, yes, but there's still a lot of skepticism that taxpayers are being asked to pay for this bailout. Here's Ohio Republican Deborah Pryce, who pointed out, you know, she doesn't have to face voters this fall. She is retiring. But she still says she needs convincing to vote for the package.
Representative DEBORAH PRYCE (Republican, Ohio): We have all read by now why Paulson is wrong. What we need to hear today is why Paulson is right. One thing we as politicians know: You can't make a move this large without the consent of the American people, and we don't have it yet.
NORRIS: Well, there you heard Republican Deborah Pryce talk about how she needed to hear from Paulson how he's right. What did Paulson say? How did he respond to the skepticism that he heard today?
NAYLOR: Well, you know, he admitted at the hearing today that he still has a bit of a sales job to do.
Secretary PAULSON: To make the case to the average American, if we don't do something like this, what are the implications for them? What's the implication for their retirement savings? What's the implication for the small business, not only to be able to expand, but to just sustain their existing operations? What is the case, you know, for the small farmer who needs a loan, the small businessman, all of that?
NAYLOR: But still, Michele, there's - you know, lawmakers are saying that it's Main Street that's bearing the brunt of the bailout. And they're concerned about how this is going to play with the voters who they'll be facing in just about five weeks from now.
NORRIS: Very quickly, before we let you go. Any sense of how this is going to play out?
NAYLOR: Well, there seems to be a better mood here than there was yesterday that this will get done. The president's speech tonight is seen as a key. Barney Frank told reporters earlier that people need to understand the seriousness of this, and a presidential address conveys that. Now, with the news that McCain is suspending his campaign, and he and Barack Obama may somehow weigh in, you know, may or may not complicate the picture. But, I think there's a consensus that there will be a deal, if not by week's end, maybe over the weekend or early next week.
NORRIS: Thank you, Brian.
NAYLOR: Thanks, Michele.
NORRIS: That was NPR's Brian Naylor on Capitol Hill.