Lawmakers focus on bailouts and look to overhaul financial regulations.
With the future of Wall Street giants on the line, Congress is not clamoring for a say in who gets federal help and who does not – at least, for now.
Democrats say that the debacle in US financial markets is the responsibility of the Bush administration: The president touted the value of deregulation; let him sort out its consequences, if he can.
But top lawmakers on both sides of the aisle do want a quick accounting for how those decisions were made and what impact they're likely to have on US taxpayers in the future.
In the longer run, they're gearing up for a battle in the new Congress over an overhaul of the nation's regulatory structure, including the possible creation of new entities modeled after the Resolution Trust Corporation, which helped resolve the savings-and-loan crisis in the late 1980s.
"Apparently, the private market is so messed up it may not be able to function unless there is more systematic federal relief in the sense of taking over some bad assets," said Rep. Barney Frank (D) of Massachusetts, who chairs the House Financial Services Committee.
Coming on the heels of a weekend decision by federal regulators not to back investment bank Lehman Brothers, Tuesday's $85 billion bailout of American International Group Inc. (AIG) took lawmakers by surprise.
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