How Much Authority Are We Proposing to Give the Treasury?
Much has been made of the bailout legislation provision that the administration would be immune to any scrutiny of any sort for any decision made vis a vis the $700 billion in bailout funds and the resulting spending decisions. But I thought this was equally telling of the over-broad power grab that is going on at Treasury:
The SHR [senior House Republican] calls this an insurance program and the original Paulson plan a
purchase program. He says Treasury Department people have told him that
they considered an insurance program but decided that a purchase
program would be better. But he also added that in the draft
legislation Paulson has advanced, the Treasury would have the authority
to set up such an insurance plan without congressional authorization.
From what he said, it struck me that both courses could be followed.
After all, neither purchases nor insurance is contemplated to take
place unless and until a financial institution comes forward and
requests one or the other.
Jeez, how much latitude are they asking for? Is the bill really so broad that the secretary of the treasury could set up an entirely new government insurance program for financial assets without further Congressional approval?
While I think Cantor is being overly-optimistic about the near-term cash flow of his insurance proposal, it does seem to be at least an incremental improvement over Paulson's plan.
