Politicians compare the $700 million deal to a 'blank check' for Wall Street

WASHINGTON - Northwest Democrats blasted the Bush administration's plan for a $700 billion financial bailout Monday as a giveaway to Wall Street.

While agreeing there is an urgent need for action, Democratic lawmakers from Washington and Oregon said the bailout plan should protect homeowners, not just Wall Street executives.

Republicans also stressed the need to protect homeowners, and at least one Republican - Rep. Bill Sali of Idaho - called for a halt on federal bailouts.

As proposed, the bailout plan benefits the same executives who created the financial mess in the first place, said Rep. Peter DeFazio, D-Ore.

The Bush plan also gives Treasury Secretary Henry Paulson the keys to the U.S. Treasury without oversight or restriction, DeFazio said, citing a provision in the bailout plan that blocks court review of actions taken by the Treasury secretary to shore up failing institutions.

Sen. Maria Cantwell, D-Wash., said the plan does not do enough to protect homeowners. "People want to know if you are bailing out Wall Street, what are you going to do for Main Street to help me keep my home?'' she said.

Cantwell and other Democrats called for a deliberate approach that avoids acting in haste - as DeFazio said Congress did in 2002 when it gave President Bush authority to invade Iraq.

"We shouldn't be rushed into this. If it takes a week, two weeks, three weeks, a month, the world will wait,'' DeFazio said. "They'll wait for a thoughtful plan that cures the disease in addition to getting us beyond this initial problem.''

But Sen. Gordon Smith, R-Ore., said the time to act is now.

"The panic that swept Wall Street last week cannot not be underestimated. This economic turmoil has threatened not just Wall Street, but also millions of people on Main Street,'' Smith said. "With Americans' retirement plans, mortgages and financial security at risk, we must act now to bring order and stability to our markets.''

Smith, locked in a close re-election campaign, pledged to work in a bipartisan fashion to draft a package that will help restore confidence in the American financial system and protect Oregon homeowners facing the loss of their homes or retirement incomes.

"The proposal, however, cannot be a blank check that allows golden parachutes and executive compensation packages for bankers and investors that drove their companies into the ground, potentially leaving taxpayers with generations of debt,'' he said.

Smith's Democratic opponent, Oregon House Speaker Jeff Merkley, used similar language. In a statement issued minutes before Smith's, Merkley called on Smith to "reject a blank check proposal for the Bush Administration,'' and said Smith should demand that any bailout package include protections for homeowners, limits on executive compensation and market reforms to prevent a future crisis.

Sen. Ron Wyden, D-Ore., called the financial meltdown a serious threat, but said that does not mean Congress should act recklessly.

"Unless we address the underlying faults in the system that brought us to this financial abyss in the first place, we may simply be building the world's largest bridge to nowhere,'' Wyden said.

Wyden called for a comprehensive solution that helps prevent mortgage foreclosures and looks for a return on taxpayer investment in banks, brokerages and insurance companies.

"Under the Bush administration's proposal, the financial institutions not only get quick cash to shore up their finances, they also get all the upside return on the taxpayers' money. Meanwhile, the taxpayers get all the risk along with a pile of bad debt that may or may not get paid sometime in the future,'' he said.