COMMENTS: Financial Capital Moves to the Capitol

Last week's five-day sweep of financial dominance of the news agenda continued. Treasury Secretary Henry Paulson's proposal to bail out financial capitalism was the unanimous choice as Story of the Day. He wants to spend $700bn in federal funds to buy illiquid securities derived from the crash in the housing market. He hopes that banks, with their balance sheets thus cleansed, will resume regular lending. All three newscasts led from Washington as Congressional leaders digested the three pages of legislation that Paulson drafted over the weekend. The national center of financial power has shifted from Wall Street to Capitol Hill.

Both ABC's Jake Tapper and CBS' Bob Orr found a consensus, in principle, that some bailout will pass. "All sides have grudgingly agreed that something has to get done," was how Orr put it. Leaders "agreed in theory," according to Tapper. So most of the reporting concerned the list of possible additions and amendments that could check and balance Paulson's powers. NBC's Tom Costello saw legislators "coming to terms with the enormity of the financial bailout the administration wants fast-tracked." Orr found Congress "in no mood to be rushed." Tapper told us: "Both Democrats and Republicans balked at handing over so much money and so much power to the Treasury Secretary."

All three reporters clearly worked the same set of sources. They each cited the same trio of early sticking points. Foreclosing homeowners should be able to have bankruptcy judges relax their mortgages. The Treasury Department's handling of the securities should be subject to oversight. Executives at participating financial firms should have exorbitant salaries, bonuses and severances curbed. NBC's Costello and CBS' Orr came up with a fourth potential rider--that the government should obtain a share of ownership in the companies it helps.


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