Frank Calls Out Paulson In Hill Hearing
Rep. Barney Frank (D-Mass.) and Treasury Secretary Hank Paulson crossed sabers moments ago during the House Financial Services committee hearing that's taking a look at how the $700 billion bailout/rescue is working.
Frank's position is that, when Congress authorized the bailout, it included specific language that would allow Treasury to use the bailout money to help homeowners directly avoid foreclosures by reducing amounts owed on their mortgages.
Paulson is arguing that his plan is necessarily working from the top down, by stabilizing the system as a whole, then banks, then Fannie Maeand Freddie Macand then, as he said moments ago, by "working on ways to use taxpayer money to work toward foreclosure mitigation."
But before Paulson could continue, Frank cut him off, saying: "It is nobody's view that we are as successful as we need to be at reducing foreclosures."
Paulson tried to respond but Frank used on of his favorite tricks, noting that time had run out.
This confrontation between Frank and Paulson goes to the heart of the conflicting pressures on Congress and the administration. Members of Congress, like Frank, are directly elected by voters and must keep those constituents happy in order to stay in Congress. Hence, lawmaker emphasis on direct homeowner help.
Paulson, however, is a presidential appointee and does not face a specific constituency that has power over his political future. Hence, Paulson is trying to manage the overall system rather than tend to the individual needs of constituents.
By the way, here is the full text of Fed Chairman Ben Bernanke's testimony before Frank's committee today.
And here is the full text of FDIC Chairwoman Sheila Bair's testimony before the committee.
-- Frank Ahrens
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November 18, 2008; 10:35 AM ET
Categories: The Ticker | Tags: Barney Frank, bailout
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