Treasury Secretary Henry M. Paulson Jr. was not warmly received at today’s bailout hearing when he stared down an angry and disenchanted Senate Banking Committee. Federal Reserve chairman, Ben S. Bernanke, who appeared with Mr. Paulson, warned that unless Congress gave Mr. Paulson $700 billion that “inaction could lead to a recession.” Oooh, they said the “R” word….

The New York Times says:

But one after another, senators from both parties said that, while they were prepared to move fast, they were far from ready to give the administration everything it wanted in its proposed $700 billion plan to buy up and hopefully resell troubled mortgages.
…
Senator Christopher J. Dodd, Democrat of Connecticut and chairman of the Senate banking panel, called the Treasury proposal “stunning and unprecedented in its scope and lack of detail.”

Asserting that the plan would allow Mr. Paulson to act with “absolute impunity,” Senator Dodd said, “After reading this proposal, I can only conclude that it is not only our economy that is at risk, Mr. Secretary, but our Constitution, as well.”

Another expression of disgust came from Senator Jim Bunning, Republican of Kentucky, who said the plan would “take Wall Street’s pain and spread it to the taxpayers.”

“It’s financial socialism, and it’s un-American,” Mr. Bunning said.

Paulson responded that he was “angry” at Wall Street and that he needed the bailout not for the fat cats who bet badly and lost, but for you, the taxpayer.

“This is all about the taxpayers. That is all we are about,” said Paulson, who was formerly the CEO of Goldman Sachs for 7 years before becoming Secretary of the Treasury in 2006.

Finance Officials Face Wary Lawmakers [NYT]
(Photo:Andrew Councill for The New York Times)

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