Government pitches record economic bailout
On Saturday, the Bush administration made its formal proposal to Congress that would allow the Treasury Department to buy up to $700 billion in in mortgage assets, the New York Times reports.
The proposal would be the largest government backed financial bailout in U.S. history. It aims to transfer the bad debts of Wall Street to the American taxpayers.
This planned bailout would be the third major action taken by the U.S. government in hopes of shoring up the economy. The Washington Post reports that the government has already pledged $200 billion to rescue mortgage giants Freddie Mac and Fannie Mae and $85 billion in loans to the major insurance company American International Group.
President Bush justified the action, citing the scale of the crisis. He was quoted by the Washington Post as saying, ‚Äúthe risk of doing nothing far outweighs the risk of the package.‚Ä?
Congressional committees began meeting immediately Saturday, with the New York Times anticipating the negotiations to be ‚Äúcomplicated but quick.‚Ä?
Although there is varying support across the board, Democratic leaders pledged to approve legislation quickly.