September 22, 2008

OK... I know asking for only $150 billion is kind of ridiculous but why should Congress commit a whopping $700 billion to the Treasury without knowing how that money will be spent? Sen. Chuck Schumer asked Secretary Paulson at today's hearing how he arrived at the $700 figure and asked for an explanation as to why Congress shouldn't give them only a fraction of that, with the rest contingent upon the situation we find ourselves in in January. Seems reasonable enough, no?

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"One of you mentioned that you will use about $50 billion dollars a month. If that's the case, and you're certainly not going to use all $700 billion immediately, and as you can see there are a lot of questions about whether this will work, we understand you've done your best and you think this will work best, but it's clear we're in uncharted waters. But what about doing this in tranches? Why couldn't you ask us for $150 billion, and on January 15th or January 20th we would come back, we would assess how this worked and grant some more money if it's really working?"

The proposed bailout is undoubtedly an intensely complex matter that's way above my pay grade, but giving Paulson a blank check for a minimum of 3/4 of a TRILLION dollars (and quite likely more) just doesn't make sense. It seems to me that the Bush administration is trying to rip off the taxpayers one last time, hoping this market "shock" can provide them enough cover to actually make it happen. Although it's far from perfect, Schumer's idea of investing a smaller amount (if any) to get us to January -- when a new President and a new Congress take office -- seems much more reasonable.

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