Lawmakers want limits on exec pay, oversight

WASHINGTON -- From the start of Tuesday's hearing on Capitol Hill, Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke's urgent call for an unprecedented federal bailout of the U.S. financial system was met by skepticism, criticism and even anger among senators in both parties.

Before long, it was clear that the sweeping proposal introduced late last week by Paulson, Bernanke and Securities and Exchange Commission Chairman Christopher Cox to try to ward off a devastating credit crunch will have to be altered — perhaps significantly — to win Congress' approval.

During the contentious hearing before the Senate Banking Committee, Paulson implored lawmakers to swiftly approve the White House's blueprint that would give the Treasury Department broad new powers to buy up troubled mortgage-backed securities and other assets. He urged senators to move "quickly and cleanly, and avoid slowing it down with other provisions that are unrelated or don't have broad support."

Paulson called the plan the "single most-effective" way to help taxpayers and the economy.

But skeptical lawmakers — who have been bombarded with phone calls and e-mails from constituents outraged by the notion of giving Wall Street a $700 billion bailout to help make up for careless lending and investment practices — were not prepared to support a three-page plan that many consider too vague.

Their questions hammered at Paulson and Bernanke about the proposed expansion of Treasury's powers while shielding it from legal challenges. Lawmakers also blasted what they said was the plan's failure to strengthen oversight of Wall Street and punish executives who have profited from risky mortgages. And they demanded to know why the plan doesn't guarantee that taxpayers would share in possible profits from mortgage bonds and other assets that would be acquired under the bailout program.

"This proposal is stunning and unprecedented in its scope and lack of detail," said Senate Banking Committee Chairman Chris Dodd, D-Conn. Later, Dodd was uncertain about the chances for swift congressional action on the plan, which the Bush administration wants passed by the end of the week.

"Congress is not a rubber stamp," said Sen. Jeff Sessions, R-Ala. "They're talking about a historic government intervention in the private sector, and they'd prefer the Congress not to ask questions."