Big questions linger for Wall Street bailout

By Lisa Mascaro

Monday, Sept. 22, 2008 | 6:09 p.m.

WASHINGTON -- We have questions about the $700 billion Wall Street bailout. And we’re not alone.

Turns out lawmakers on both sides of the aisle are scrutinizing the Bush administration’s plan today as they face enormous pressure to approve what experts are calling the biggest government intervention in the U.S. economy in history.

We still don’t know, for example, who would decide the value of the lousy mortgage-backed securities the taxpayers are about to buy. Or what kind of oversight would be established for the private firms facilitating the transactions. Or whether assistance would trickle down to homeowners in Nevada who are being foreclosed upon at rates greater than anywhere else in the country.

Senate Majority Leader Harry Reid said today that while Democrats are prepared to act swiftly, they will not “let haste abandon good judgment.”

“The Bush Administration has called on Congress to rubber stamp its bailout legislation without serious debate or efforts to improve it. That will not happen,” Reid said Monday afternoon.

President Bush and congressional Republican leaders urged the Hill to quickly approve the White House plan so as not to further antagonize the already distressed markets.

And that was before the stock market nosedived again today.

Sen. Mitch McConnell of Kentucky, the Republican leader, said that when you’re house is on fire, you don’t stop and ask the firemen for smoke detectors. “You want them to put out the fire,” McConnell said this afternoon.

He warned against using the Bush administration’s plan as “flypaper for partisan add-ons.”

Democrats are unveiling alternative legislation that would provide various levels of oversight to the White House plan, limit golden parachutes for executives and offer homeowners foreclosure relief.

Lawmakers from both sides of the aisle are suggesting improvements.

One key element for homeowners in the bill put forward today by Sen. Chris Dodd, chairman of the Senate Banking Committee, is a controversial provision to give bankruptcy judges enhanced authority to write down mortgages.

Bankruptcy judges can already reduce mortgages to market values for vacation homes, but Democrats want to extend that power to first homes. A similar provision was killed when Democrats tried to include it in the housing relief bill that became law earlier this year.

“The Bush Administration’s bill is a starting point; by no means the final product,” Reid said. “Democrats believe that there should be protection for the taxpayers who are footing the bill for this legislation.”

Reid also says that he will continue to pursue an economic recovery

program for jobs in infrastructure and renewable energy before Congress adjourns, either separately or as part of this bill.

Nevada’s other lawmakers have so far been quiet on the rescue plan, but we’ll look forward to hearing from them as the vote nears.