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Republicans Push Back As Paulson Urges Aid For Mortgage Giants
Treasury Secretary Henry Paulson wants Congress to pass the aid plan for Fannie and Freddie "quickly."
(Susan Walsh - AP)
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Both Frank and Dodd said they are confident that Congress would ultimately approve the package. But Frank nonetheless was busily shoring up support among liberal Democrats by promising to include nearly $4 billion in grants for communities to purchase foreclosed properties, a top priority for the Congressional Black Caucus.
That money is opposed by the White House, which has threatened to veto the package if it is included. But Democrats think the administration's desire for the rescue plan and several other provisions will overcome those objections.
According to a spokesman, the House Republican Conference invited Paulson to explain his rescue plan after many lawmakers expressed reservations and sometimes outrage.
"The people of the 5th District of Texas, who are struggling to fill up their gas tank, don't want to bail out a bunch of Wall Street executives and be told, 'Well, they're too big to fail and you're too little to help.' They don't want to hear that," said Rep. Jeb Hensarling (R-Tex.), chairman of the Republican Study Committee, a group of more than 100 House conservatives, and one of the proposal's harshest critics.
Unless Paulson demonstrates "a compelling reason why we should add to taxpayers' liability," Hensarling said, "most House conservatives will be opposed to the current [rescue] plan."
Spencer Bachus (Ala.), ranking Republican on the House Financial Services Committee, said "government and ultimately taxpayers should not assume responsibility for losses or indemnify private investors," adding that he is "particularly concerned about what appears to be a 'privatize the profits, socialize the losses' approach where investors reap market gains and taxpayers are stuck with the losses."
Staff writers David S. Hilzenrath and Renae Merle and washingtonpost.com staff writer Ben Pershing contributed to this report.
