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Sen. Shelby Blasts Bush’s Finacial Fix

Richard Shelby says it would be "foolish" to spend so much public money ($700 billion) on an idea that was developed so quickly and might not work. Sen. Shelby Blasts Bush’s Finacial Fix

Published: Mon, September 22, 2008 - 4:26 pm

WASHINGTON – Alabama’s senior senator says speed should not be the primary focus for Congress as it considers a multi-billion dollar bailout of the nation’s financial system.

“In my judgment, it would be foolish to waste massive sums of taxpayer funds testing an idea that has been hastily crafted, and may actually cause the government to revert to an inadequate strategy of ad hoc bailouts,” Sen. Richard Shelby said in a statement Monday.

Shelby is the top Republican on the Senate banking committee, which has oversight of the nation’s financial markets. Shelby will be one of the key players in the bailout of banks' mortgage debt, congressional analysts said.

“His role is critical,” said Ross Baker, a congressional expert and professor of political science at Rutgers University.

Shelby, a former chair of the committee under Republican rule of the Senate, has a good working relationship with its current chairman, Sen. Christopher Dodd, D-Conn., said Baker. That means Dodd will take Shelby’s input seriously, he said.

“For a Republican, he will probably have a much more commanding role,” Baker said.

The senator expressed concern Monday about the bailout package proposed by President Bush.

The administration is urging swift passage of the rescue plan, the thrust of which most lawmakers agree even as specifics still need to be hammered out.

Shelby said the government must immediately undertake a more studied, comprehensive measure, rather than take swift action.

His statement on Monday followed his appearance Sunday on “Face the Nation” on CBS, during which Shelby said the plan will cost substantially more than $700 billion and that no one knows the final result.

“This is the mother of all bailouts and we don’t see the end in it yet,” he said.

Shelby, who’s calling for “massive, tough regulatory reform,” said he’s not in favor of increasing taxes, but “sooner or later there’s got to be a reckoning.”

On Monday, the administration and congressional leaders agreed to include mortgage aid and strong congressional oversight in the aid package for failing financial institutions.

Key details could emerge mid-week, when the House is expected to take up the bailout bill.

Another Republican Alabama lawmaker, Rep. Spencer Bachus of Birmingham, holds a top spot on the House Financial Services Committee, which oversees the nation's housing and financial services sectors.

Baker said Bachus is expected to be less influential in shaping the legislation because the House tends to operate in a more partisan matter.

But David Lanoue, a professor of political science at the University of Alabama, said Bachus will still have influence because “both parties recognize that they need to jump into this together.”

“I don’t think you’re going to see a lot of the partisan bickering you’ve seen the last few years because the stakes are too high,” he said.