Congressman John Tierney said yesterday that lawmakers should not be pressured to push through the Bush administration's $700 billion plan to bail out the financial industry.
"We should take whatever time we need," the Democrat from Salem said. "We should not be stampeded into it."
Meanwhile, his opponent in the November election, Republican Richard Baker, was yesterday trying to come to terms with how much the government proposes to intervene.
"On an emotional level, it's extremely troubling to me," he said. "It's not the free market. It's so far beyond what I believe America stands for."
Treasury Secretary Henry Paulson has asked Congress to quickly adopt a plan that would enable the government to buy bad mortgages and other troubled assets held by endangered banks and financial institutions. Getting those debts off their books should bolster their balance sheets, making them more inclined to lend money and help turn around the economy by easing one of the biggest choke points in the credit crisis, Paulson has argued.
Tierney and others in Washington oppose the unchecked authority the plan gives the Bush administration to spend the money. It's a dubious approach given the administration and Paulson's track record, Tierney said.
"This is the same person who for a year and a half said everything was fine and then said the problem was contained," he said.
Tierney yesterday said lawmakers needed to hear "fresh viewpoints" from economic experts outside the administration and outside Washington. He also said Congress had to know what assets would be purchased and how those assets would be valued.
If they're valued too high, then taxpayers could be funding "windfall profits" for executives of the troubled companies, Tierney said. If valued too low, then the companies might not get the boost they need to ignite the economy.
Taxpayers need to get a "piece of the action," Tierney said. That means they deserve a return on whatever profits the government's investment generates, he said.
The congressman said no bonuses or "golden parachutes" should be available to company executives. And he supported, when appropriate, the restructuring of homeowners' mortgages to avoid foreclosures.
Regulations that improve accountability on Wall Street, as well as financial regulators, should accompany the taxpayers' help, Tierney said.
It could take days or weeks for the necessary deliberations, Tierney said.
"We're not talking months," he said.
Baker is a West Newbury resident who is challenging Tierney for the 6th Congressional District seat. The district consists of 36 communities and stretches from Reading to Newburyport.
An intellectual-property licensor at 3Com Corp. in Marlborough, Baker recently opened his campaign headquarters on Cabot Street in Beverly. He is a former member of the Pentucket School Committee.
Baker yesterday lamented federal lawmakers' failure to address the country's financial problems before they escalated to a crisis.
"Congress should have seen this coming, and it didn't. They should have put a stop to it all," Baker said.
"They're all to blame, all of Washington. I'm frustrated with my own party as well as the Democrats."
He worried about the precedent-setting aspects of the government's involvement over the past two weeks, stepping in to rescue mortgage giants Freddie Mac and Fannie Mae and the insurance company American International Group Inc. and now betting a massive bailout will stabilize a reeling economy.
"We shouldn't be operating a corporate welfare system," he said. "It's ludicrous."
Baker said that the bailout proposal put forth by Paulson put "too much power in the executive branch." He supported attaching conditions to the financing, including limits on the so-called "golden parachutes" available to the executives of the failing financial firms.
"That's part of the cost of going to the government for a bailout," he said.
But he had not made up his mind yesterday as to whether he would support allowing judges to rewrite bankrupt homeowners' mortgages so they could avoid foreclosure.
The government's huge expenditures will swell an already large deficit that should force governmental cuts, as opposed to tax increases, to shrink it, Baker said. He was less sure about when the economy would turn around.
"It doesn't look like something that is going to resolve itself quickly," he said.
Material from The Associated Press was used in this report.
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