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US Congress balks at huge financial bailout
(Agencies)
Updated: 2008-09-24 10:35


(L-R) US Treasury Secretary Henry Paulson, Federal Reserve Chairman Ben Bernanke, and Securities and Exchange Commission Chairman Christopher Cox testify before the Senate Banking Committee on Capitol Hill September 23, 2008. [Agencies]

Washington - A battle over the US government's financial rescue package heated up in Congress Tuesday, with top finance officials urging its swift passage and lawmakers digging in their heels.

Federal Reserve chairman Ben Bernanke and Treasury Secretary Henry Paulson, testifying to Congress after proposing the 700-billion-dollar bailout just days ago, argued that lawmakers must pass the emergency measure quickly or put the entire US economy at risk.

"What they have sent to us -- this is not acceptable," Senator Christopher Dodd, chairman of the Senate Banking Committee, told reporters after Bernanke and Paulson testified.

"A lot of reservations have been expressed this morning by Democrats and Republicans on this matter," said Dodd, a Democrat. "This is not going to work."

"They're going to have to come back and work with us," he said.

The two finance chiefs were to face more grilling Wednesday at a hearing of the House of Representatives Financial Services Committee amid rising opposition to what would be the largest US government financial intervention since the 1930s Great Depression.

Democratic congressional leaders and some Republican colleagues have insisted the bailout, crafted by Paulson, a former Goldman Sachs president, include sweeping safeguards and oversight to protect US taxpayers.

Bernanke told the Senate banking panel that despite unprecedented steps already taken by the Republican administration to confront the crisis, global financial markets "remain under extraordinary stress."

Action was "urgently required to stabilize the situation and avert what otherwise could be very serious consequences for our financial markets and for our economy," he testified at a Senate Banking Committee hearing.

Paulson, echoing Bernanke's comments, warned that if Congress did not act quickly, a credit crisis could threaten "all parts of our economy."

The warnings came as US President George W. Bush vowed before world leaders at the United Nations headquarters that US lawmakers would approve the country's largest financial bailout since the 1930s Great Depression.

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