"This is a good foundation that can stabilize our markets quickly. Make no mistake about it. Nothing should slow this down," Sen. Charles E. Schumer (D-N.Y.) said.
But House Speaker Nancy Pelosi (D-San Francisco), speaking after an hourlong phone conference with fellow Democrats, made clear that they were not prepared to abandon their proposals to broaden the scope of the plan to include help for homeowners and others, as well as at least some regulatory provisions to prevent a repeat of the crisis.
"We will strengthen the proposal by ensuring that the government is accountable to the taxpayers . . . implementing strong oversight mechanisms and establishing fast-track authority for the Congress to act on responsible regulatory reform," she said, and "protect lower- and middle-income Americans, who need to be protected from the fallout of the ongoing Wall Street crisis by enacting an economic recovery package."
Such a package would add considerably to the already gargantuan costs of the plan and would come on top of the more than $100 billion in tax rebates sent this year at the administration's request.
Some conservative Republicans also expressed unhappiness. Rep. Mike Pence (R-Ind.) said, "Our financial markets are in turmoil and the administration was right to call for decisive action to prevent further harm to our economy, but nationalizing every bad mortgage in America is not the answer."
In forwarding his proposal to Congress, Paulson made good on his promise of "bold" steps to end the yearlong crisis that has sunk some of the nation's biggest financial powerhouses, created turmoil on Wall Street and pushed the struggling economy closer to recession.
And he in effect acknowledged that his previous ad hoc efforts and those of Federal Reserve Chairman Ben S. Bernanke to contain the debacle had failed.
The Paulson plan would give the Treasury secretary spectacularly wide leeway to buy, manage and sell mortgages and mortgage-related securities with the aim, in the words of the proposal, of "providing stability or preventing disruption to the financial markets or banking system" and "protecting the taxpayer."
The only limitations would be that Treasury's stock of troubled assets could not total more than $700 billion at any one time, that the buying program would end after two years, and that Paulson or his successor would regularly report to Congress. Moreover, though the proposal says Treasury's new authority would expire after two years, the history of past grants of emergency power suggests that Congress finds it hard not to renew them.
