By Mark Wineka
mwineka@salisburypost.com
U.S. Rep. Mel Watt, closely involved in details of a possible $700 billion bailout plan for the financial industry, said it seems to be evolving “in a direction that is a good direction.”
A member of the House Financial Services Committee, Watt said once he accepted as accurate the warnings over the weekend that the country risked a dire economic future without government intervention, he jumped in.
The plan being developed will be more friendly to taxpayers and borrowers and not simply a bailout of “people who made a lot of money by doing a lot of bad things,” Watt said Tuesday.
It would be irresponsible for the government not to take serious steps, Watt added.
Ty Cobb, Watt’s Republican opponent in the Nov. 4 general election, could not be reached for comment Tuesday evening.
Watt said his office has received many communications from constituents in which they express a general uneasiness with Congress even considering a $700 billion bailout.
He said he has tried to be as transparent as possible in explaining that the information Congress has received from Federal Reserve Chairman Ben Bernanke and Treasury Secretary Henry Paulson “is absolutely frightening.”
Watt said he understood Bernanke and Paulson have been hesitant to say things that might make matters worse, though they could.
“We view this as not really having a choice, based on what they have told us,” Watt said.
The federal officials fear that a run on banks and a drying up of credit on virtually everything could result without the federal government’s help, Watt said.
In coming days and weeks, Bernanke and Paulson will have to say more to the public to give the whole bailout context, Watt said.
“And we (Congress) have to do a better job of explaining the changes,” Watt said.
Watt acknowledged the initial bailout plan was sent to Congress as a request to give $700 billion to the treasury secretary without any oversight or accountability.
“Basically a blank check,” he said.
Watt said he thought a plan would be ready by the end of the week.