Bipartisan Hill Kudos for Nationalization
Congressional leaders offered bipartisan praise for today's actions, saying that Treasury Secretary Hank Paulson was taking steps that he initially resisted but were pushed early by House and Senate negotiators.
House Speaker Nancy Pelosi (D-Calif.) called the joint announcements "steps in the right direction that could help restore confidence" in the markets.
"From the first days of negotiations on the Emergency Economic Stabilization Act, Congress demonstrated bipartisan support for direct injections of capital into troubled financial institutions, even though the administration's preferred approach was primarily to purchase troubled assets," Pelosi said in a statement. "The decision of President Bush and Secretary Paulson to take the critical step of direct purchases of preferred stock in financial institutions will, if conducted correctly, protect the interests of taxpayers."
House Minority Whip Roy Blunt (R-Mo.), the lead House GOP negotiator, also expressed support for the actions, suggesting that House Republicans supported taking stakes in the banks and firms as a way to immediately provide capital while also creating "an almost certain guarantee" that the federal government would recoup its expenditures.
"This is an opportunity that the administration didn't really initially ask for," Blunt said in a conference call with reporters.
While acknowledging some conservatives might oppose the idea of a partial nationalization of banks, Blunt said that the limitations of a 15 percent stake should more than satisfy those wary of too much government influence in the private markets.
He noted that "the stake is not nearly as large" as the bank takeovers happening in parts of Europe.
-- Paul Kane
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