Finance rescue plan needs more work

Talks are set to resume in Washington DC this morning after a late night session yesterday ended without agreement on the governmentÔÇÖs $700 billion bailout plan for the troubled US finance sector.  ┬á A day that started with high hopes after President Bush told the nation that Congress had to approve the plan quickly to avoid a potentially ÔÇ£long and deep recessionÔÇØ ended at 10pm with Republicans in revolt.┬á┬á Legislators appeared close to an agreement earlier in the day, before senior members of Congress met the president at the White House, but the deal went sour from there as Republican Congressmen expressed concern over the size of the rescue package and the level of government interference in business.┬á┬á Senator Christopher Dodd, chairman of the Senate Banking Committee, had said earlier in the day they had reached "fundamental agreement" on the principles of a deal, but after the White House meeting, the top Republican on the committee, Richard Shelby of Alabama, told reporters: "I don't believe we have an agreement." ┬á┬á "I'm feeling somewhat puzzled at this point," commented Democrat Representative Barney Frank, of Massachusetts, the Financial Services Committee chairman who has been leading negotiations with Treasury secretary Henry Paulson. "We're closer to a deal among the House Democrats, Senate Democrats, Senate Republicans and the administration. ... We seem further away with the House Republicans."┬á┬á The bail-out plan, as it was first proposed last week, would help relieve finance firms of their "toxic" bad debt, complex financial instruments backed by sub-prime mortgages, on which many householders can no longer maintain their repayments. ┬á┬á Some kind of deal seems likely to be hammered out, if not today, then at least early next week, but it is clear that Congress is unhappy being railroaded into acceptance of a hastily put-together plan without building in adequate regulatory controls and safeguards for taxpayers.┬á┬á You canÔÇÖt blame them for being careful. $700 billion is a huge sum of money, and if this rescue package is approved and fails to achieve its objectives, what next?  ┬á┬á┬á*┬á┬á┬á┬á┬á┬á┬á┬á┬á *┬á┬á┬á┬á┬á┬á┬á┬á┬á *