$700 Billion Dollar Switcheroo

November 18, 2008 12:00:00 AM PST
Today on Capitol Hill stunned lawmakers listened as the nation's leading financial experts reversed course on how to get the economy back on its feet. Tuesday morning the bush finance team was on Capitol Hill, explaining why they now want to use the troubled assets relief program, or "TARP," to inject billions into banks instead of buying bad mortgage-backed assets: the centerpiece of the original plan.

"We adjusted our strategy to reflect the facts of a severe market crisis always keeping focused on congress's goal and our goal; to stabilize the financial system that is integral to the everyday lives of all Americans," said Treasury Secretary Henry Paulson.

Some Democrats were irate and demanded answers. "Clearly the point was to stop foreclosures, not just to infuse, it could not have been more clear," said Representative Barney Frank (D) Massachusetts.

"The fact that you took the initiative to change this, ignore what we did, just amazes me," said Representative Maxine Waters (D) California.

Some republicans applauded Paulson's flexibility. "Conditions on the ground change and you must be agile and adjust and I hope we can all understand that," said Representative Spencer Bachus (R) Alabama.

At odds with the Bush Administration, FDIC Chair Sheila Bair wants to guarantee modified mortgages through the end of next year to help over a million struggling borrowers.

Paulson assured lawmakers that the Treasury will look for new ways to boost the availability of auto loans and credit cards, which have become harder to get due to the credit crisis.



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