Bush: Bailout Plan Would Cost Less Than $700B
President Says U.S. Taxpayers Would Recoup Most, If Not All, Of Their Money
Saturday, September 27, 2008; 4:14 PM
President Bush said today that his administration's proposed financial rescue package would actually cost less than its estimated pricetag of $700 billion because taxpayers would eventually recoup most, if not all, of their money.
In his weekly radio address, Bush said the mortgage assets at the heart of the plan are cheap now but are likely to rise after the government buys them.
"Many of these assets still have significant underlying value, because the vast majority of people will eventually pay off their mortgages," Bush said. "In other words, many of the assets the government would buy are likely to go up in price over time. This means that the government will be able to recoup much, if not all, of the original expenditure."
Although the administration has asserted from the beginning that taxpayers may get back some of their money, Bush's speech marked a new emphasis on the idea that the actual cost of a rescue deal would be less than feared.
The remarks come as lawmakers continue to wrangle over the terms of a rescue package, which Bush and his aides have characterized as a crucial move to preserve financial and credit markets on the brink of collapse.
The $700 billion package would amount to the most extensive government intervention in the markets since the Great Depression, and it has prompted a rebellion among conservative House Republicans. Democratic leaders remain hopeful they can broker a final deal before Asian markets open late Sunday.
Bush, who has increased his involvement in the debate after first leaving matters largely to Treasury Secretary Henry M. Paulson Jr., attempted to address criticisms from the right and left that the plan would bail out irresponsible financiers while doing nothing for regular Americans. But Bush, echoing frequent statements by him and his aides, said that allowing a further Wall Street collapse would pose greater dangers to the overall economy.
"The rescue effort we're negotiating is not aimed at Wall Street -- it is aimed at your street," Bush said. "And there is now widespread agreement on the major principles. We must free up the flow of credit to consumers and businesses by reducing the risk posed by troubled assets."
Although he said that inaction could lead to a "deep and painful recession," Bush's radio address was notably less alarmist in its tone and language than his primetime speech to the nation last Wednesday, in which he warned that "our entire economy is in danger" from a potential "financial panic."