Costly questions: Details matter on bailout plan
Nothing like a $700 billion price tag to fix the nation's financial sector to get nearly everyone in Washington talking like a free marketeer.
Democrats and Republicans, big-government believers and advocates of decentralization invoked the marketplace's power to punish those behind the current credit crisis as Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke led the Bush administration's push for the proposed bailout Tuesday on Capitol Hill.
Even Rep. Henry Waxman, D-Calif., a firm believer in an interventionist government, doubted intervention on such a scale, worrying in a news release the bailout would limit the effect of "moral hazard" on Wall Street firms, whose greed and poor judgment were a major cause of the near-meltdown of the country's financial system.
Paulson and Bernanke absorbed lawmakers' anger and frustration. They said they were angry and frustrated, too. But they insisted the solution lies in the government buying up hundreds of billions of dollars in bad mortgages and mortgage-backed securities to get credit flowing again. Without it, they said, almost every aspect of American life would be affected.
They met increasing skepticism over the plan's staggering cost to taxpayers, its fairness and its likelihood of success.
Senate Banking Committee Chairman Christopher Dodd, D-Conn., said the Paulson plan is unacceptable as proposed. Lawmakers won't be rushed when it comes to writing a $700 billion check.
Nor should they be. Paulson and Bernanke accepted the need for strong oversight of the plan and transparency in its execution. But there are too many details to be worked out for Congress to go blindly along.
Our guess is the administration and key members of Congress, the initial public posturing dispensed with, will huddle to figure out things such as which banks and investment firms will be involved in the bailout and whether there will be a price to be paid for taking the taxpayers' money.
Many Americans accept the need for bold action. But the details matter. Congress must get them before going forward.