Testifying in front of the Senate Banking Committee, the nation's top financial leaders urged congress to act quickly to pass a $700-billion-dollar economic bailout plan or face financial disaster.
Fed Chairman Ben Bernanke and Treasury Secretary Henry Paulson said the problem began in the housing market and was brought to a head with the collapse of Lehman Brothers and AIG as investors lost confidence in the companies; quickly drying up available funds.
"We saw market turmoil reach a new level last week, and spill over into the rest of the economy. We must now take further, decisive action to fundamentally and comprehensively address the root cause of this turmoil," said Paulson.
Now the problems aren't just affecting the U.S. economy and Tuesday President Bush tried to reassure nervous world leaders. "I've assured them as well that having spoken to the leaders of the congress from both political parties there is the desire to get something done quickly."
Negotiations between congress and the bush administration are ongoing. Congress wants judges to be able to re-negotiate mortgages for homeowners on the verge of foreclosure. And the more emotional issue, congress wants a cap on executive pay for the bailed-out companies taking part in the government plan.
Vice President Dick Cheney was also on Capitol Hill Tuesday working to convince lawmakers to accept the plan. Bernanke and Paulson will be back on the hill tomorrow.
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