Sep 20, 2008 10:17
WASHINGTON (AP) -- The Bush administration is asking Congress to let the government buy $700 billion in toxic mortgages in the largest financial bailout since the Great Depression, according to a draft of the plan obtained Saturday by The Associated Press.
The plan would give the government broad power to buy the bad debt of any U.S. financial institution for the next two years. It would raise the statutory limit on the national debt from $10.6 trillion to $11.3 trillion to make room for the massive rescue. The proposal does not specify what the government would get in return from financial companies for the federal assistance.
''We're going to work with Congress to get a bill done quickly,'' President Bush said at the White House. Without discussing details of the plan, he said, ''This is a big package because it was a big problem...Bush said he worried the financial troubles ''could ripple throughout'' the economy and affect average citizens. ''The risk of doing nothing far outweighs the risk of the package, and over time we're going to get a lot of the money back.''''In my judgment, based upon the advice of a lot of people who know how markets work, this problem wasn't going to be contained to just the financial community,'' the president said. He said he was concerned about ''Main Street'' and that what happens on ''Wall Street'' affects ''Main Street.''
Democrats are insisting the rescue include mortgage help to let struggling homeowners avoid foreclosures. They also are also considering attaching additional middle-class assistance to the legislation despite a request from Bush to avoid adding controversial items that could delay action. An expansion of jobless benefits was one possibility.
Asked about the chances of adding such items, Bush sidestepped the question, saying only that now was not the time for political posturing. ''The cleaner the better,'' he said about legislation he hopes Congress sends back to him at the White House.''