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 That is the question facing lawmakers on Capitol Hill.
At issue is a variation of the bill that was narrowly rejected by Congress Monday, which would have given the Treasury Dept. $700 billion to buy illiquid mortgage assets from financial institutions.
A group of eight Democrats late Thursday introduced a plan that would throw a wrench into that bill and replace it with a proposal they dubbed "The No Bailout Act," which would suspend the Securities and Exchange Commission's fair-value accounting standard for banks, prohibit short selling and set up a program to be run by the Federal Deposit Insurance Corp. that would help financial institutions obtain short-term capital. The legislation also would set up a Dept. of Justice task force on financial fraud. Many Republicans have supported making changes to the SEC rules instead of buying illiquid mortgage assets. Other Republicans back other "no bailout" proposals.
But are other lawmakers biting? In the Senate there appears to be major opposition for doing anything except the $700 billion bailout, at least with several conditions attached to it. Senators plan to vote on the legislation Wednesday evening, in an effort to prod the House to vote on the government purchase plan. Sen. Hillary Clinton, D-N.Y., says, "You're not going to find anyone who believes that this bill is perfect. Many of us regret deeply and very much resist having to bail out those who we believe contributed mightily to the problems we're in. But there is no choice." Sen. John Kerry, D-Mass., had similar thoughts. He too supports the package, which he said "was developed to stop the ripple effect of the collapse of Wall Street's major financial institutions from developing into an economic tsunami sweeping across the country." House majority leader Steny Hoyer didn't seem so confident about whether lawmakers will keep the $700 billion plan. "It still remains to be decided when the House will consider new legislation regarding the economic crisis," he said. But many House lawmakers aren't on board with removal of the central $700 billion purchase part of the Paulson plan: "We can consider additional provisions to improve the legislation, but I caution my colleagues that during this economic crisis is not the time to let the perfect become the enemy of the good. While we do not have a perfect bill, we do have a perfect storm," said Rep. Paul Kanjorski, D-Penn. - Ron Orol Ron Orol is a Washington-based reporter for The Deal and author of Extreme Value Hedging: How Activist Hedge Fund Managers Are Taking on the World. Categories Deal Video
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