The Bush administration has insisted that Congress must move quickly to approve what one lawmaker called the "mother of all bailouts" - a $700 billion proposal to buy a mountain of bad mortgage debt in an effort to unfreeze the nation's credit markets.
Congressional leaders endorsed the plan's main thrust, saying passage might occur in a matter of days. But they said it must be expanded to include help for people on Main Street as well as the big Wall Street financial firms who have lost billions of dollars through their bad investment decisions.
The proposal "does not include the necessary safeguards," said House Speaker Nancy Pelosi. She called for "independent oversight, protections for homeowners and constraints on excessive executive compensation."
Treasury Secretary Henry Paulson stressed that time was critical to get the proposal passed and that changes to the administration's measure, which was sent to lawmakers on Saturday, could delay that approval, further unsettling global financial markets, which have already seen a number of stomach-churning days as the result of the biggest upheaval on Wall Street since the Great Depression.
In yet another indication of how quickly events are moving, the Federal Reserve announced late yesterday that it had granted a request by Goldman Sachs and Morgan Stanley, the country's last two major independent investment banks, to change their status to bank holding companies.
The change will allow the two institutions to open commercial banking subsidiaries, greatly bolstering the resources of both institutions.
