Debating A Bailout Plan

By Latoya Silmon, The News On 6

WASHINGTON, DC - Economic troubles continue across the nation.  The Treasury Secretary and Federal Reserve Chairman are at the center of the bailout debate happening on Capitol Hill.

The top two money men are in the hot seat.  The Senate fired off tough questions at Treasury Secretary Henry Paulson and Fed Chairman Ben Bernanke.

With some on Wall Street out on the street, and banks battling to stay in business, the U.S. Treasury Secretary and Federal Reserve Chairman say Congress must act now.

"Action by the Congress is urgently required for the situation and advert what otherwise will be very serious consequences for our financial markets  and for our economy," said Fed Chairman Ben Bernanke.

But, members of Congress are reluctant to sign off on what some consider a blank check to bailout Wall Street.  Some Congressmen worry about how it will affect main street and small community banks.

"It is a danger that community banks will be affected when they're among the least guilty.  They didn't make bad subprime loans," said Congressman Barney Frank.

Secretary Henry Paulson says the program is not only aimed at big financial institutions and that the little guys stand to get a piece of the $700 billion pie.

"I think this is something we haven't communicated maybe as clearly as we should have about the program," said Treasury Secretary Henry Paulson.

"There's a lot of that going around, Mr. Secretary," countered Congressman Frank. 

Others attacked the complexity of a plan many Americans are still struggling to understand.

"You have to back up and think about America average people. They really want to know what is meant by far less than the alternative.  And, you've got to tell us," said another member of the committee.

Bernanke says the plan will create liquidity of assets, reduce investor uncertainty, and help restore confidence so banks and others can raise capital.  Without that, Bernanke says the economy will tank.

He and Paulson say time is running out, but Congress is reluctant to rush its decision.  Paulson and Bernanke hope Congress will approve the bailout by the end of the week.

In the meantime, Republican Presidential nominee John McCain wants to postpone his debate with Democratic nominee Barack Obama.  He says everyone should focus on the economy right now.  But, Obama  says right now is the time when Americans need to hear their thoughts the most.