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martes, 23 de septiembre de 2008

Paulson y Bernanke instan a legisladores aprobar el Plan de Rescate Financiero

Trascripción de una publicación de Wall Street Journal, Digital Network aparecida el día de hoy, cuya versión original la puede ver en www.wsj.com. También la pueden traducirlo a su idioma de preferencia, utilizando el comando "translate" que está ubicado en la parte derecha de su pantalla.

"Paulson, Bernanke Tell Lawmakers
Urgent Action Needed on Treasury Plan"

By: GREG HITT, BRIAN BLACKSTONE and TOM BARKLEY

"WASHINGTON -- U.S. Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke urged swift action on a Treasury Department plan to buy illiquid mortgage-linked securities and avoid severe spillover effects on the economy.
Mr. Paulson cautioned lawmakers against letting the plan get bogged down in a debate over unnecessary additions.
Senate Banking Committee leaders voiced skepticism Tuesday about the U.S. Treasury's plan to buy up to $700 billion in mortgage-related assets, seeking assurances that the program will work.
Mr. Bernanke said the process would help restore pricing in those markets. He also outlined a dire scenario of rising unemployment, more foreclosures and falling gross domestic product if nothing is done to shore up financial markets.
"Over these past days, it has become clear that there is bipartisan consensus for an urgent legislative solution," Mr. Paulson said in prepared remarks to the Senate Banking Committee. "We need to build upon this spirit to enact this bill quickly and cleanly, and avoid slowing it down with other provisions that are unrelated or don't have broad support."
With the financial crisis hitting a "new level" and spilling over into the rest of the economy, the root cause must be addressed by removing the troubled mortgage-related assets from the system, Mr. Paulson said.
In remarks to the Senate Banking Committee, Mr. Bernanke urged lawmakers to make a distinction between "fire-sale" prices and "hold-to-maturity" prices for these markets. Given uncertainties in the housing and financial markets, the fire-sale price, Mr. Bernanke said, can be much lower than the hold-to-maturity prices, potentially feeding a "vicious circle" of asset sales and further write-downs.
"Under the Treasury program, auctions and other mechanisms could be designed to give the market good information on what the hold-to-maturity price is for a large class of mortgage-related assets," Mr. Bernanke said.
Under a reverse auction system, multiple firms would bid to the Treasury to sell their assets, Mr. Bernanke said. Echoing Mr. Bernanke's remarks, Mr. Paulson said that once Treasury bids on mortgage-related debt, it will act as a "price discovery mechanism."
Mr. Bernanke also said the $700 billion price tag of the Treasury rescue plan -- which represents about 5% of all outstanding mortgages -- doesn't mean it will cost taxpayers that much. If the plan is executed well, taxpayers "will get good value" for the assets purchased under the plan, he said.
In addition, "this is a precondition for a good healthy recovery of our economy," Mr. Bernanke said.
Mr. Bernanke also stressed that he doesn't come to this crisis with Wall Street's interests at heart, and noted that he was even criticized when he became Fed chairman for not having Wall Street experience. "My interest is solely for recovery of the U.S. economy," Mr. Bernanke said.
Mr. Bernanke also indicated that he would be receptive to further actions to prevent mortgage foreclosures. "I'm sure much more could be done, I would support further action," Mr. Bernanke said.
Senate Banking Committee Chairman Christopher Dodd (D., Conn.) said the plan must include oversight and measures to help homeowners avoid foreclosures.
"We must address the root cause by putting an end to the rising number of foreclosures sweeping across our nation," Mr. Dodd said in opening remarks at a hearing with Treasury Secretary Paulson, Fed Chairman Bernanke, Securities and Exchange Commission Chairman Christopher Cox and Federal Housing Finance Agency Director James Lockhart.
Mr. Dodd said taxpayers also need assurance that their money is being used "correctly and responsibly."
Sen. Richard Shelby (R., Ala.) the ranking Republican, criticized the plan, saying it "merely codifies Treasury's ad-hoc approach."
The Treasury package is coming under increasing fire in Congress, from the left and right. And as negotiators grope for a compromise package, it is clear the Democratic leadership, which has entered into an uneasy alliance with the White House, will have to work hard to hold the political center as pivotal votes loom late this week.
As Mr. Paulson testified before the Senate Banking Committee, the White House dispatched Vice President Cheney, Bush Chief of Staff Josh Bolten, and Keith Hennessy, a top Bush economic adviser, Tuesday morning to lobby House Republicans. The stepped-up effort to came amid signs of growing discontent among House conservatives.
Late Monday, members of the Republican Study Committee, a conservative-dominated group that represents about half of the 199 House Republicans, held an emergency meeting on the Treasury plan and announced plans to develop a free-market alternative. Among conservatives, there is deep concern about the cost of the bailout and the sweep of the powers that would be concentrated in the Treasury secretary. The demand by Democrats for limits on executive pay is only adding to conservative concerns, and conservatives want tax cuts and other policy changes they say would better help shaky markets.
But for Democrats, the proposed limits on compensation underscore what's wrong with the Treasury plan. They contend the plan would put U.S. taxpayers on the hook for hundreds of billions of dollars and force no accountability on executives at companies about to be rescued.
The White House is resisting. But the ability of Mr. Paulson -- who contends some finance firms might not participate if they're forced to agree to pay limits -- to hold the line on the issue appears to be eroding.
Rep. Barney Frank (D., Mass.) scoffed at the secretary, suggesting that "what he's saying" is "that some CEOs put their ability to get unrestricted excessive compensation, including rewards for failure, over and above trying to cooperate in helping the economy." Mr. Frank added, "If that's true, we are in worse shape than we think."
For Democrats, the package is posing an unwanted test of its ability to work with Mr. Bush. In times of crisis over the last eight years, Democrats have closed ranks with Mr. Bush, such as after Sept. 11. But they have often been left frustrated, and the lingering bitterness toward the president is now complicating efforts to rally support.
"This is eerily similar to the rush to war in Iraq," said Rep. Mike McNulty, a New York Democrat, voicing deep skepticism. "We have been told repeatedly by this administration that the economy is fundamentally sound, and then all of the sudden they say the economy is going to collapse. That is unacceptable."
In the House, a group of Democrats led by Rep Brad Sherman (D., Calif.) is pressing Democratic leaders to only give the administration $200 billion in borrowing authority, delaying action to give time to assess whether the proposal is working. In the Senate, a group of influential liberal Democrats including Iowa's Tom Harkin and Virginia's Jim Webb, is pressing for tougher oversight and conditions on the bailout, including a mandate that companies receiving assistance be limited in their ability to pay dividends.
"It is time for Congress to refocus attention on helping hardworking Americans," said Mr. Harkin."

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