The nation's congressional and economic leaders say they are committed to quickly forging a bipartisan plan to stabilize the teetering U.S. finance industry and calm tremors felt all the way to Main Street, U.S.A.
After he and Federal Reserve Chairman Ben Bernanke briefed congressional leaders for approximately 90 minutes Thursday night, Treasury Secretary Henry Paulson said the plan likely would require legislation from Congress, which is led by Democrats.
The plan, which Congressional leaders hope to get today, would allow the federal government to buy up toxic assets, such as bad mortgages, held by troubled banks and other institutions.
Congressional leaders said they expected to act on the plan before taking a pre-election recess.
Paulson and Bernanke began their discussion in House Speaker Nancy Pelosi's office by focusing on a comprehensive approach to address the bad debts on bank balance sheets, an underlying source of the trouble with America's financial institutions and financial markets.
"The root cause of the stress in the capital markets is the real estate correction," Paulson said afterwards. "We're coming together to work for an expeditious solution, which is aimed right at the heart of this problem, which is illiquid assets on financial institutions' balance sheets."
The economic officials were exploring all options, legislative and administrative, and expect to work through the weekend with congressional leaders to find a solution they all can agree on.
"This crisis isn't about solving the problems with banks or people who hold commercial paper," House Minority Leader John Boehner, R-Ohio, said afterwards. "This is about saving our economy, saving American jobs, making sure that people's retirement security is as secure as they think it is and protecting people's savings."
Senate Majority Leader Harry Reid, D-Nev., suggested that he expected to see more details from the Bush team -- and quickly.
"Congressional leaders expressed our hope that the administration provide us the details of their proposal for addressing our economic crisis as soon as possible," he said in a written statement. "We all understand the stakes, we have all committed to working with the administration, and we are all anxious to see their proposal within a matter of hours, not days."
Before the briefing began, Pelosi, D-Calif., flanked by Reid, Boehner, and other congressional leaders, suggested Democrats are eager to work in a bipartisan fashion -- as long as their concerns are addressed.
"Understanding that we have a financial crisis in our economy," said Pelosi, "we are here to work together for solutions that will solve that crisis in a way that insulates taxpayers, insulates Main Street from the crisis."
In a letter to President Bush earlier in the afternoon, Pelosi said she wanted to ensure a consistent approach to the "ongoing market turmoil" by developing a bipartisan recovery effort, and offered to postpone Congress' planned adjournment on Friday, Sept. 26, to address the ongoing financial crisis.
The Bush team has come to the conclusion that continuing to handle the financial crisis on a case-by-case basis -- as it has with plans to address the failures of AIG, Inc., Lehman Bros. and Bear Stearns -- will not work, a senior administration source said. Instead, White House officials are working on a larger, strategic solution, realizing they may not have much time to act.