Govt Bailout Could Reach $1 Trillion

Sept. 19, 2008 — -- Congress is considering a plan proposed by the US government that would amount to one of the biggest bailouts in U.S. history.

Lawmakers are expected to move by the end of the week on a plan proposed by the US Treasury and Federal Reserve last night to buy up all the bad debt and distressed mortgages from banks and firms on the brink of disaster in an effort to stem the economic crisis sweeping Wall Street.

"To listen to the language last evening that we're literally maybe days away from a complete meltdown of our financial system with all the implications here at home and globally," Sen. Chris Dodd, D-Conn., chairman of the Senate Banking Committee told ABC's Diane Sawyer on Friday's "Good Morning America."

"This is about a serious a situation as both Richard and I would say we've confronted in our collective years in Congress -- I've been here 28 years," Dodd said of Sen. Richard Shelby, R-Ala., the top Republican on the Senate Banking Committee.

Shelby told Sawyer the bailout could cost a half a trillion dollars.

"I figure it'll be at least a half a trillion," Shelby said when pressed on the size of the bailout, "but when you look at what the Fed[eral Reserve] has already done, and the extension of power to Treasury to deal with Fannie Mae and Freddie Mac, I believe we're talking about a trillion dollars."

"That's going to visit the taxpayer. Sooner or later it's either going to be a debt charged to all of us to our children," Shelby said.

While congressional leaders pledged to work together to stave off a further economic meltdown, Dodd blamed the institutions charged with regulating the financial industry.

"This was avoidable. This did not have to happen. Where were the cops on the beat? Where were the regulators? When these loans were being made they did nothing." Dodd told Sawyer on "GMA."

Shelby stressed the need for more information. "Is this their super-plan?" he asked on "GMA."

"We want to see the details … this is not a done deal yet, but we know there's a crisis, there's stress in the financial markets," he said.