U.S. launches all-out attack on credit crisis
Written on September 20, 2008
The United States surged into action on Friday to launch an all-out attack against the worst financial crisis since the Great Depression, readying a plan to tap hundreds of billions of dollars in taxpayer funds to buy up toxic mortgage-related debt.
Capping a week that has reshaped Wall Street, Treasury Secretary Henry Paulson urged Congress to quickly agree on a program for huge purchases of bad debts held by banks and other financial institutions.
Lawmakers promised fast action on the plan, which two banking industry sources put in the $500 billion to $800 billion range.
Losses on mortgage-related debts have choked the financial system, forced lenders into bankruptcy and led the economy to what President George W. Bush called a “pivotal” moment.
“America’s economy is facing unprecedented challenges, and we are responding with unprecedented action,” Bush told reporters in the White House Rose Garden.
After having taken a series of other emergency steps that failed to erect a firewall against the spreading credit turmoil, U.S payday loans. authorities turned their attention to the underlying problem — the rising tide of bad mortgage debt.
Paulson offered few details on Treasury’s proposal but said he would work through the weekend and next week with Congress to get a program put in place. The proposal being sent to lawmakers would run only a few pages, a source said. A congressional aide said staff on Capitol Hill would be briefed on the plan on Saturday morning.
Rep. Steny Hoyer, the Democratic leader in the House of Representatives, said the chamber would likely take up a bill to implement the program early next week. House Speaker Nancy Pelosi said lawmakers would stay in town past their hoped-for adjournment next Friday if needed to pass it.
Filed in: finance.