Paulson asks Senate for keys to economy

In choosing which companies to save in this recent period, “We have acted on a case-by-case basis,” but “more is needed,” said Treasury Secretary Henry Paulson in a hearing today before the Senate Banking, Housing, and Urban Affairs Committee. Paulson sent a proposal to Congress that would give the Treasury Department $700 billion to buy out and run various companies the government plans to take over due to potential bankruptcy.

Paulson said that the government must “fundamentally and comprehensively address the root cause of this turmoil.” That turmoil, he says, is the housing market. He said the housing market is “choking off the flow of credit which is so vitally important to our economy.” Chairman of the Federal Reserve System Ben Bernanke echoed the sentiment that our economy will only improve when the housing market improves.

Many senators had similar problems with Paulson’s proposal. Sen. Chris Dodd (D-Conn.) said of Paulson’s proposal that, “It would do nothing to help even a single family save a home.” Senator Chuck Schumer (D-N.Y.) said that any bill would have to account and include the taxpayers, housing market, oversight, and regulation. He used the acronym “THOR” to refer to those four issues. Sen. Chuck Hagel (R-Neb.) said that the proposal must include more accountability and transparency. He also said that Congress must drastically rethink its economic policies for “a 21st century global marketplace.” Sen. Michael Enzi (R-Wyo.) said that because the proposed bill would cost each U.S. citizen approximately $2,300, they had to be accounted for.