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House Lawmakers Divided Over Scope of Government Intervention

Congressional leaders are showing signs of fatigue and frustration over continuing negotiations. Reps. Barney Frank and Mike Pence discuss the progress towards a workable plan.

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  • MARGARET WARNER:

    And to help us understand where a potential deal stands tonight and what obstacles remain, we turn to two House members involved in all this.

    Democrat Barney Frank of Massachusetts is chairman of the House Financial Services Committee. He's been in the forefront of negotiations with Treasury Secretary Paulson and congressional leaders since the outset.

    And Republican Mike Pence of Indiana is one of the leading figures in the coalition of House conservatives pushing a Republican counterproposal.

    Welcome, gentlemen, to you both.

    So, Chairman Franks, where are you now? How close are you to a deal?

    REP. BARNEY FRANK (D), Massachusetts: Well, the Senate Democrats, Senate Republicans, House Democrats, and the secretary of the Treasury, representing the Bush administration, have gotten close.

    We looked at the original plan. We've added strong language to control CEO compensation, where they're getting some benefits. We have insisted on putting in warrants so that, where there's a profitability that comes to a company that benefited the taxpayers, they share in that.

    We objected to $700 billion all at once and have put in some controls to stagger it. And we have some very significant oversight that it doesn't have.

    Given that, our judgment is this. You have the two top economic advisers of President Bush telling us that if we don't do something quickly there's a crisis.

    But I have to tell you that, even if you think that wasn't true before they said it, it's very likely to be true after they said it. When the chairman of the Federal Reserve and the secretary of the Treasury say this, it does narrow, it seems to me, congressional options in this situation.

    So we thought the most responsible thing to do was to take their proposal and work with it.

    The House Republicans had only very recently, I must tell you, surfaced a different approach, not with enough time for any of to us look at it. We first heard about it, really, on Thursday.

    And it is a — I guess I would say this. One proposal is to add an insurance component. If that was added as one of the tools the secretary could use, that would never have been controversial and people were for it.

    But if they are asking that we substitute this mechanism for what the Bush administration has asked, with first coming to us on Thursday, I just don't see how that can be done, especially if Secretary Paulson says he does not think that mechanism would work.

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