Treasury Secretary Henry Paulson, Federal Reserve Chair Ben Bernanke repeatedly clashed with almost every senator on the committee, all of whom focused on Wall Street’s culpability for the crisis. Many also brought up executive pay and emphasized the need for oversight of the Treasury. Section 8 of Secretary Paulson’s bailout proposal explicitly denies any check on his powers. It says, “Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.”
Treasury Secretary Paulson, speaking before the Senate Banking Committee. : “e gave you a simple three-page legislative outline, and I thought it would have been presumptuous for us on that outline to come up with an oversight mechanism. That’s the role of Congress. That’s something we’re going to work on together. So if any of you felt that I didn’t believe that we needed oversight, I believe we need oversight. We need oversight. We need protection. We need transparency. I want it. We all want it.”
[ last 8 years he dont want that. Now why he is asking for that? ]
Comments from some Senators
SEN. CHRIS DODD said “Barely seventy-two hours ago, Secretary Paulson presented a proposal that he believes, and others do as well, is urgently needed to protect our economy. This proposal is stunning and unprecedented in its scope and lack of detail, I might add. It would allow the Secretary of the Treasury to intervene in our economy by purchasing at least $700 billion of toxic assets. It would allow the Secretary to hold onto those assets for years and to pay millions of dollars to handpicked firms to manage those assets.
It would do nothing, in my view, to help a single family save a home, at least not upfront. It would do nothing to stop even a single CEO from dumping billions of dollars of toxic assets on the backs of American taxpayers, while at the same time do nothing to stop the very authors of this calamity to walk away with bonuses and golden parachutes worth millions of dollars. And it would allow the Secretary and his successors to act with utter and absolute impunity, without review by any agency or a court of law. After reading this proposal, I can only conclude that it is not just our economy that is at risk, but our Constitution, as well.”
Sen. RICHARD SHELBY said “We’re now facing the most serious economic crisis, as Chairman Dodd said, in a generation. So far, the Treasury Department’s and the Fed’s response to the crisis has been a series of ad hoc measures. First came the bailout of Bear Stearns, which we were told was unavoidable. Then came Lehman Brothers, which was allowed to fail. And then, just last week, the Fed and Treasury organized a bailout of AIG. I believe the absence of a clear and comprehensive plan for addressing this crisis has injected additional uncertainty into our markets, and it has undetermined the ability of our markets to tackle this crisis on their own.
Unfortunately, the Treasury Department’s latest proposal continues, I believe, its ad hoc approach, but on a much grander scale. The Treasury’s plan has little for those outside of the financial industry. It is aimed at rescuing the same financial institutions that created this crisis, with the sloppy underwriting and reckless disregard for the risks they were creating, taking or passing on to others. Wall Street bet that the government would rescue them if they got into trouble. It appears that bet may be the one that pays off.
Once again, what troubles me most is that we have been given no credible assurances that this plan will work. We could very well spend $700 billion or a trillion and not resolve the crisis.”
SEN. JIM BUNNING said “We cannot make bad mortgages go away. We cannot make the losses that our financial institutions are facing go away. Someone must take those losses. We can either let the people who made the bad decisions bear the consequences of their actions, or we can spread that pain to others. And that is exactly what the Secretary’s proposal is to do: take Wall Street’s pain and spread it to the taxpayers. The Paulson plan will not help struggling homeowners pay their mortgages. The Paulson plan will not bring—the Paulson plan will spend $700 billion worth of taxpayers’ money to prop up and clean up the balance sheets of Wall Street. This massive bailout is not a solution. It is a financial socialism, and it’s un-American.”
SEN. SHERROD BROWN: I don’t think a single call to my office on this proposal has been positive. I don’t believe I’ve gotten one yet of the literally thousands of emails and calls we’re getting. Part of this reflects outrage by taxpayers making $30,000, $40,000, $50,000, $75,000, $100,000 a year bailing out people whose country club memberships cost many times that. Part of it is, I think, an attitude. Wall Street, to most people in my state, I think, certainly to many of them, Wall Street didn’t care one bit what it was doing to neighborhoods in Cleveland and Dayton and Toledo. It didn’t see the devastation. It didn’t feel the pain. And my question for each of you is, do you think that—do you think Wall Street owes the American people an apology?
BEN BERNANKE: blah blah blah….
SEN. SHERROD BROWN: I No, Mr. Chairman, people know that what happens on Wall Street has an effect on their lives. That’s not the question. The question is, does Wall Street owe the American people an apology?
BEN BERNANKE: blah blah blah….
SEN. SHERROD BROWN: Secretary Paulson?
HENRY PAULSON:: blah blah blah….
SEN. SHERROD BROWN: No disrespect, Mr. Secretary, but they understand much of that. They do want a solution, but they don’t want the same people that have helped to inflict this pain on the American people to get the opportunity, because of our reluctance on executive compensation and our reluctance to do accountability, to inflict more pain.
– from www.democracynow.org