By Sean Mussenden
Media General News Service
Media General News Service
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WASHINGTON—The leading budget watchdog in the House said Monday that he plans a hearing this week to assess the financial impact of the Bush administration’s proposal to purchase billions of dollars in Wall Street debt.
The administration on Sunday proposed giving the Treasury secretary wide authority to purchase $700 billion in securities, a move it said was needed to stave off economic collapse.
The proposal was light on key details that would help determine how much the plan could ultimately cost taxpayers.
“The bill they just sent us is just a skeletal bill,” Rep. John Spratt, D-S.C., chair of the House Budget Committee, said in an interview. “We’re waiting to get answers.”
Even in government terms, $700 billion is a lot of money. It’s even more than the total cost-to-date of the Iraq war, an estimated $550 billion, according to the National Priorities Project, a group that tracks government spending.
It’s unclear if buying the bad debt will actually end up costing taxpayers that much, though. While the administration proposal will allow for the purchase of $700 billion in securities linked to bad debt, the ultimate cost to taxpayers hinges on how much the government can sell the securities for in the future.
“We can't determine what the cost is today. That's going to be based upon how quickly the economy recovers, what happens in the mortgage market. But I can assure you the cost won't be anything like what is put out to buy these investments and these assets,” Treasury Secretary Henry Paulson said Sunday on NBC’s “Meet the Press.”
What South Carolina Lawmakers Say About the Administration’s Bailout Proposal
“I respect Secretary Paulson, but no individual should have this much ‘blank check’ authority. The oversight and accountability provisions in the initial proposal were limited and must be strengthened.”
--Sen. Lindsey Graham, R-S.C.
“The administration put forth a plan over the weekend to address the situation and begin to move forward. It will not be easy, but it is now the challenge of Congress to find a solution. As proposals are debated this week, we must weigh the effects, both short-term and long-term, of any action versus the costs of doing nothing.”
--Rep. Gresham Barrett, R-S.C.
Sean Mussenden can be reached at smussenden@mediageneral.com or 202-662-7668
The administration on Sunday proposed giving the Treasury secretary wide authority to purchase $700 billion in securities, a move it said was needed to stave off economic collapse.
The proposal was light on key details that would help determine how much the plan could ultimately cost taxpayers.
“The bill they just sent us is just a skeletal bill,” Rep. John Spratt, D-S.C., chair of the House Budget Committee, said in an interview. “We’re waiting to get answers.”
Even in government terms, $700 billion is a lot of money. It’s even more than the total cost-to-date of the Iraq war, an estimated $550 billion, according to the National Priorities Project, a group that tracks government spending.
It’s unclear if buying the bad debt will actually end up costing taxpayers that much, though. While the administration proposal will allow for the purchase of $700 billion in securities linked to bad debt, the ultimate cost to taxpayers hinges on how much the government can sell the securities for in the future.
“We can't determine what the cost is today. That's going to be based upon how quickly the economy recovers, what happens in the mortgage market. But I can assure you the cost won't be anything like what is put out to buy these investments and these assets,” Treasury Secretary Henry Paulson said Sunday on NBC’s “Meet the Press.”
What South Carolina Lawmakers Say About the Administration’s Bailout Proposal
“I respect Secretary Paulson, but no individual should have this much ‘blank check’ authority. The oversight and accountability provisions in the initial proposal were limited and must be strengthened.”
--Sen. Lindsey Graham, R-S.C.
“The administration put forth a plan over the weekend to address the situation and begin to move forward. It will not be easy, but it is now the challenge of Congress to find a solution. As proposals are debated this week, we must weigh the effects, both short-term and long-term, of any action versus the costs of doing nothing.”
--Rep. Gresham Barrett, R-S.C.
Sean Mussenden can be reached at smussenden@mediageneral.com or 202-662-7668