By Maura Reynolds and Peter G. Gosselin , Los Angeles Times|September 21, 2008
WASHINGTON — WASHINGTON - The Bush administration formally asked Congress yesterday to grant sweeping new powers to the Treasury secretary to buy as much as $700 billion in deeply troubled mortgage-related assets as part of a Herculean effort to clean up Wall Street's financial crisis.
A draft of the plan was delivered to Congress early yesterday, and lawmakers will spend the weekend poring over it. As written, Treasury Secretary Henry M. Paulson Jr. and his successor would be handed expansive authority, beyond the reach of U.S. courts, to attempt to rescue staggering financial markets.
At the White House, President Bush acknowledged the immensity of the plan, which would bypass many of the traditional checks and balances of government.
"This is a big package, because it was a big problem," Bush said in the Oval Office as he met yesterday with the president of Colombia. "I will tell our citizens and continue to remind them that the risk of doing nothing far outweighs the risk of the package, and that, over time, we're going to get a lot of the money back."
Bush and his administration hope the bill moves smoothly through Congress, but potential obstacles were becoming apparent early yesterday. Democrats have asked that the administration plan include measures to address the root of the financial crisis: the housing bubble burst that fueled a wave of foreclosures around the country.
"This is a good foundation of a plan that can stabilize markets quickly. But it includes no visible protection for taxpayers or homeowners," said Sen. Charles E. Schumer, a Democrat from New York and chairman of Congress' Joint Economic Committee. "We look forward to talking to Treasury to see what, if anything, they have in mind in these two areas."
The new powers, which would expire after two years, would require the Treasury secretary to put equal weight on the welfare of the taxpayer as well as Wall Street in using the extraordinary authority.
"In exercising the authorities granted in this act, the secretary shall take into consideration means for (1) providing stability or preventing disruption to the financial markets or banking system; and (2) protecting the taxpayer," the draft says.
The powers granted under the law also would be difficult to challenge. The new authorities "may not be reviewed by any court of law or any administrative agency," although the Treasury secretary would be required to report to Congress on how he was exercising them.
