President Bush is reportedly personally lobbying Republicans who have staged a revolt against the administration’s plan to borrow $700 billion to buy up toxic assets from banks and financial institutions, and said publicly today that "we got a big problem" that requires prompt action by Congress.
House Republican Leader Rep. John Boehner of Ohio is demanding "serious consideration" of an alternative plan where banks and other investors holding frozen mortgage assets would pay the Treasury Department to insure them.
Bush said lawmakers "want to be able to express their opinions, and they should be allowed to express their opinions," but said there is no disagreement that something substantial must be done. The president urged lawmakers to resolve disagreements over aspects of the Treasury plan, but did not on comment Boehner’s proposal, which takes a completely different approach.
Boehner wants to unfreeze mortgage-backed securities by extending insurance similar to the guarantees provided by Fannie Mae and Freddie Mac on loans they package and sell to investors. That, in conjunction with removing regulatory and tax barriers that block the flow of capital into financial markets, can help resolve the financial crisis without taxpayer expense, he argues.
"Too much private capital is sitting on the sidelines during this crisis," Boehner said in publishing a list of "Economic Rescue Principles" on the Web.
Democrats aren’t willing to accept the tax cuts and insurance provisions of Boehner’s plan, the Associated Press reported, leaving open the possibility of deadlock.
White House press secretary Dana Perino said she saw no reason to believe an agreement can’t be reached by Monday.
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