"We have children going to schools in deplorable conditions, and so we wanted more money in school construction. We thought, not only does that create jobs, it's an investment in the future. And so those kinds of programs we really, really wanted to fight for. As it turns out, we have through the conference committee accepted the amendments from those Republicans who were willing to step up to the bat and at least do something for the people of this country. And so we lost on some of it, but it's a big win for all families and all Americans," Waters said.
The bipartisan panel also tackled the bank bailout and the debate over whether the remaining $350 billion in TARP funds will be enough to save the banking system.
"I know $350 billion is not enough to deal with the toxic assets and jump-start housing," Graham asserted. When asked how much more he believes is needed, Graham explained "some people tell me over a half a trillion dollars. And after this exercise of TARP I and now the stimulus bill, it makes it harder for everybody here to go back to the public and say, 'Please give us more money,' because we seem irresponsible."
While Treasury Secretary Tim Geithner's plan, outlined last week, had several different elements -- including setting up a new public-private partnership to buy toxic assets, new capital injections and a new stress test for the banks -- he did not reveal how much more money would be required, and several economists are now saying that what's really needed is nationalization of the banks.
Obama, however, has disagreed, telling ABC News' Terry Moran last week that "we want to retain a strong sense of private capital fulfilling the core investment needs of this country."
Graham said that he is open to the idea of nationalizing the banks.
"I think if you put most of our major banks under a stress test, they're going to fail... This idea of nationalizing banks is not comfortable, but I think we have gotten so many toxic assets spread throughout the banking and financial community throughout the world that we're going to have to do something that no one ever envisioned a year ago, no one likes, but, to me, banking and housing are the root cause of this problem. And I'm very much afraid that any program to salvage the bank is going to require the government....I would not take off the idea of nationalizing the banks," he said.
Schumer again disagreed, arguing that nationalization will not be necessary. "You can have a big, bold, successful plan without nationalization. That's what the administration is trying to do," Schumer said.
The panelists also responded to the new executive compensation provision added to the stimulus that would cap bonus pay for executives at financial institutions that have received TARP money at a third of their salary. Opponents, including those in the Obama administration fear the provision would lead to a "brain drain" and that workers would be lost to foreign banks or that it would promote a salary increase at the banks.