Congress unites behind emergency market plan

Congressional leaders from both parties said they were unified around a yet-to-be seen proposal from the Treasury Department meant to stem the bleeding on Wall Street following a meeting with administration officials Thursday night.

No details of the proposal were given, but House Financial Services Committee Chairman Barney Frank (D-Mass.) said what was being discussed was a government entity with the ability to buy up liquid assets and prevent housing foreclosures.

{mosads}Treasury, the Federal Reserve and the Securities and Exchange Commission are putting together the proposal and will be sending it to Congress within the next few days, Frank said.

Frank and all other congressional participants in the emergency meeting with Treasury Secretary Henry Paulson, Federal Reserve Chairman Ben Bernanke and SEC Chairman Christopher Cox said House and Senate leaders quickly reached an agreement to green light the proposal.

“We agreed to do legislation that will create an entity somewhere in the federal government to buy up liquid assets,” Frank said.

Paulson said the administration would send to the Hill an “approach to deal with the systemic risks in our market right now” as soon as possible.

“We are working on a expeditious solution aimed right at the heart of this problem,” Paulson said, which he described as the “real estate correction in the market.”

House Speaker Nancy Pelosi (D-Calif.), Minority Leader John Boehner (R-Ohio), Senate Majority Leader Harry Reid (D-Nev.) and Senate Minority Leader Mitch McConnell (R-Ky.) said that they all agreed to unite behind the proposal.

“They made clear that they need legislative authority, and there was a bipartisan conversation, bicameral, about giving them that authority,” Boehner said.

“I think we saw the best of the United States of America in the Speaker’s office tonight,” Paulson said.

But while there was praise for the agreement to speed through the proposal, there were warning signs that the no-questions-asked attitude suggests the problems that Treasury and the Fed are dealing with are larger than even previously thought.

“I’ve been in the Senate for 28 years, Congress 34,” said Senate Banking Committee Chairman Christopher Dodd (D-Conn.). “There has never been a moment as serious as this one.”

The new found unity between congressional leaders and the administration’s point-men on Wall Street was a 180-degree turn from where Republicans and Democrats had been even Thursday morning, when members of both parties openly voiced frustration that Paulson and Bernanke had not communicated more about their plans to bailout some financial giants while letting others fall into bankruptcy.

After a dramatic fall earlier in the week, the Dow Jones jumped 400 points Thursday afternoon as some news agencies reported the government was working on a new plan to help banks that have been devastated by this week's financial meltdown.

Now, Congress is looking to clear that plan virtually as soon as they see it.

“We’re talking about before we adjourn. And maybe we push back adjournment a few days,” Frank said. “But we’re not talking months here.”

Reid suggested it could be even sooner than the end of next week before Congress gets its hands on the Treasury and Fed proposal.

“We all understand the stakes, we have all committed to working with the administration, and we are all anxious to see their proposal within a matter of hours, not days,” Reid said.