Bush to Address the Nation on $700 Billion Rescue Plan

Wednesday, September 24, 2008 - By Staff Writer, Originator Times


WASHINGTON, D.C. - President Bush will address the nation this evening with a prime-time speech aimed at urging the Congress to pass a proposed $700 billion financial market rescue plan.

According to President Bush, the bailout plan is needed to “shore up our markets and prevent damage to our capital markets, businesses, our housing sector, and retirement accounts.”
“Failure to act would have broad consequences far beyond Wall Street. It would threaten small business owners and homeowners on Main Street,” Bush reiterated.

Federal Reserve chief Ben Bernanke said in discussing the economic outlook before the Joint Economic Committee that, “Government assistance should be given with the greatest of reluctance and only when the stability of the financial system, and, consequently, the health of the broader economy, is at risk. Action by the Congress is urgently required to stabilize the situation and avert what otherwise could be very serious consequences for our financial markets and for our economy.”

“In this regard, the Federal Reserve supports the Treasury's proposal to buy illiquid assets from financial institutions,” continued Bernanke. “Purchasing impaired assets will create liquidity and promote price discovery in the markets for these assets, while reducing investor uncertainty about the current value and prospects of financial institutions. More generally, removing these assets from institutions’ balance sheets will help to restore confidence in our financial markets and enable banks and other institutions to raise capital and to expand credit to support economic growth.”
Chairman of the U.S. Senate Committee on Banking, Housing, and Urban Affairs Chris Dodd thinks the proposal is lacking a number of provisions. Dodd said in a statement, “The breadth of the Treasury proposal is extraordinary: the Department is asking for $700 billion to purchase any asset without any transparency as to the process; without any oversight by any court or administrative agency; and without any commitment to helping homeowners with troubled mortgages.”

Dodd proposes several measures to achieve transparency, accountability, and assistance for homeowners, including one controversial provision that would allow for court-supervised loan modifications - which some industry groups like the Mortgage Bankers Association are vehemently against.

MBA’s Chief Operating Officer John Courson sent a letter to Congress today showing support of a quick passage of legislation, but encouraged legislators to not include "unrelated provisions to the bill", primarily changes to the bankruptcy code that would allow judges to alter residential mortgages in bankruptcy. The MBA believes this would result in further instability in the market for both consumers and the financial industry.

President Bush will address the nation Wednesday evening at 9 pm EST