Washington: The $700 billion bailout package for Wall Street crafted by lawmakers on Sunday, touted as the best way to avert financial disaster, has failed to win over some skeptics who say it came too hastily and doubt it will work.
“We have to do this right, not fast,” said Marcy Kapture, a Democratic lawmaker from Ohio, one of the states most affected by bad mortgages and foreclosures at the heart of the current financial crisis.
Kapture’s sentiments were shared by a group of lawmakers who steadfastedly refuse to support the rescue package and demand more time to draft a better solution.
The White House and Democrat and Republican members of Congress put the final touches Sunday on an historic bill that will allow the US Treasury to buy bad mortgage-related assets from banks.
It will be the broadest intervention into the national economy since the Great Depression of the 1930s.
The news may have calmed fears that global markets would continue falling with deadlocked talks, but some House of Representatives members - mostly Republicans but including a few Democrats - were not happy with the breakthrough.
Texas Representative Michael Burgess joined fellow Republican dissenters to express concern about the how quicly the new legislation was cobbled together and the pressure lawmakers are under to vote for it - the House is expected to vote on Monday and the Senate later this week.
Burgess described the rescue package as the “the largest fundamental change in our nation’s financial system in history.”
Representative Brad Sherman, a California Democrat, has formed a small group of Democrats called the “Skeptics Caucus,” who gathered with economists to question the bailout’s effectiveness.
He equated the legislation as a power-grab for the Bush administration.
“This is the greatest shift of power to the imperial presidency and the greatest shift of wealth to a still wealthy Wall Street that anyone could imagine,” said Sherman.
Former Federal Deposit Insurance Corporation chairman William Isaac concurred with the disgruntled Skeptics at the meeting.
“I doubt the $700 billion bailout will work,” he said.
Other people invited to the Skeptics Caucus also doubted the bill’s power to restore stability.
Dean Baker, co-director of the Center for Economic and Policy Research, said that all the “talk about the Great Depression is a scare tactic,” and warned that he didn’t “see the bill taking care of the house bubble problem.”
University of Texas economist James Galbraith agreed. “Does this give us a little time? It does,” he said.
“But it’s not going to solve the difficulty of the home finances.”