S.C., N.C. lawmakers debate bailout plan

Once again, Republican Sens. Jim DeMint and Lindsey Graham of South Carolina find themselves on opposite sides of a major issue.

DeMint attacked the Bush administration's financial-services bailout plan on national TV Wednesday. Graham defended the $700 billion rescue plan as a necessary evil.

“The government cannot manage this much money effectively without inefficiencies and corruption,” DeMint said on NBC's “Today” show.

Graham, a close adviser to GOP presidential candidate John McCain, said lawmakers must act.

“I've got one bad choice, which is for the government to get involved in this matter in a way that's never been done before. … Or I can pass the buck and have a catastrophic meltdown,” Graham said

As Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke appealed to lawmakers, three committee hearings in Congress addressed the crisis.

“The president has called for Congress to act with dispatch, but we must also act with diligence and deliberation,” said Rep. John Spratt, a York, S.C. Democrat, as he convened a House Budget Committee hearing.

Afterward, Spratt said intense negotiations were altering the proposal almost hourly.

“I'm waiting to see how many of these ideas actually make the cut,” Spratt said. “But I think it's been vastly improved from what the president sent up here. I wouldn't be surprised to see the overall cost of the bill cut back.”

Rep. Mel Watt, a Charlotte Democrat, said he's glad President Bush addressed the nation.

“As vain as we (Congress) are, the message leader of this country is the president of the United States,” said Watt. “Whether we believe him or not, he's got to deliver the message.”

At a hearing of the House Financial Services Committee, Watt said he's hearing from constituents who don't understand the imperative to do anything at all.

“I've been talking to a number of bankers, small bankers in particular, who apparently don't understand the urgency of this situation,” he added. “They think things are going pretty well. They think this is you guys being big Wall Street guys…and it hasn't triggered in with them about the urgency.”

Bernanke told Watt that small and community bankers are often “shock absorbers” in the economy, but he assured him that many who depend on commercial real estate are feeling stress right now.

Rep. Brad Miller, a Raleigh Democrat and member of financial services, said both House and Senate counterproposals to the Bush administration include his plan to allow bankruptcy judges to rewrite the terms of mortgage deals so struggling families can stay in their homes.

He criticized banking industry leaders.

“I think the price for this rescue should be real reform for this industry,” Miller said. “It's entirely their own fault they're drowning, and they're making demands about the type of rope that's being thrown to them.”