Trade-offs in the bailout compromise
TEXT OF INTERVIEW
Scott Jagow: Now, onto the bailout. As you probably know, congressional leaders and the White House reached a compromise over the weekend. The House is debating it as we speak and may vote today. The Senate will vote later in the week. It’s still a $700 billion package, but some things have changed.
We’re joined by our correspondent in Washington, John Dimsdale, as Marketplace continues its coverage of the financial crisis. John, tell us about the trade-offs that were made to get this deal done.
John Dimsdale: Yeah, to allow the members to go home and say on their campaign trail that “I held out for the best deal possible to protect taxpayers.” There are new things in there. For example, the money’s going to be doled out in installments, not all at once. There are extra layers of oversight that would reign in Treasury’s power. There’s this new option for banks, it’s an insurance program, it could limit taxpayer liability. And the plan now gives the government the ability to go back to the banks — the ones who benefit from the bailout — five years from now and hit them up with fees to make taxpayers whole.
So the Republicans got a final prod from President Bush this morning. He came out and spoke to reporters about how this plan will jumpstart the flow of credit:
President George W. Bush: Every member of Congress and every American should keep in mind: A vote for this bill is a vote to prevent economic damage to you and your community.
Jagow: All right, John, but I’m still hearing rumblings of dissatisfaction about this bill. What kind of misgivings do people on Capitol Hill still have?
Dimsdale: The primary concern is concern that the $700 billion won’t be enough. What if we spend it all and there’s still a credit freeze? And that’s a gamble that the Treasury Secretary and the congressional leaders who are backing the plan are taking. Remember, these politians go before voters in a little over a month, and the public out there is really skeptical about the plan. So this is going to be a tough vote for anybody on the right or the left. The moderates are holding, but it’s a question of who on the fringes will vote for this.
Jagow: All right, John Dimsdale in Washington. Thank you.
Dimsdale: Thank you.
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