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Band of Dems Blasts Geithner's Plan

Saturday, October 31, 2009

Proposed nearly unlimited bailout authority would even further expand executive power

By Mike Lillis
The Colorado Independent

WASHINGTON– Appearing before a House panel on Thursday, Treasury Secretary Tim Geithner made his best pitch for legislation granting the White House broad new powers to seize Wall Street firms when their collapse might torpedo others in the industry. It didn’t go so well.


A number of Democrats on the House Financial Services Committee unfurled a laundry list of charges against the proposal, including the prominent concern that the bill would empower the president — and future presidents –with unlimited bailout authority to prop up “too-big-to-fail” institutions at the expense of taxpayers.

“Mr. Secretary, I’m not a man that fears this administration or you,” Rep. Paul Kanjorski (D-Pa.) told Geithner. “But I do fear the accumulation of power exercised by someone in the future that can be extraordinary.”

Rep. Brad Sherman (D-Calif.) echoed those concerns, arguing that the bill represents “the most unprecedented transfer of power to the executive branch to make decisions about both spending and taxes in history — all without congressional approval.”

The tone of the comments could foreshadow a tough road ahead, not only for the White House, but for Financial Services Chairman Barney Frank (D-Mass.), who introduced legislation this week that grants the Treasury’s request to broaden the president’s “resolution authority.” The bill is one of the final pieces of the finance-reform puzzle that Frank has been putting together all year. But by conceding most of the administration’s requests, the Massachusetts Democrat — who asked no questions of Geithner Thursday — has riled others on his panel, who want to see more taxpayer protections in the bill....(Remainder.)

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