By JORDAN ZAPPALA
If Tuesday's Capitol Hill hearing on the financial crisis centered on so-called golden parachutes for failing corporate CEOs, discussion at the House Financial Services Committee hearing Wednesday swirled around another central point: the effect of the crisis on Main Street.
In front of clicking cameras and a packed room, Treasury Secretary Henry Paulson stated emphatically that the entire plan presented to Congress was for the benefit of the average taxpayer -- and not corporate giants -- because "the ultimate taxpayer protection will be stabilizing our system."
"Every business in America depends on money flowing through the financial system," he said.
"We're trying to protect Main Street," said Rep. Chris Shays, R-Conn., before Wednesday's hearing. "We're trying to protect 401(k)s, college savings, retirement funds. It's so students can get college loans. It's not about Wall Street, it's Main Street."
Shays' 4th District challenger, ex-Goldman Sachs executive Jim Himes, said he would want to ensure taxpayer protection in the pending legislation.
"This bailout cannot be a blank check for Wall Street," he said Wednesday. "Any bailout should be carefully considered and must include smart regulation, a stimulus package that works on Main Street, and should address runaway executive compensation for companies seeking relief."
Federal Reserve Chairman Ben Bernanke said that if credit is frozen, the average American will not be able to lease a car, buy a home or send a child to college. Moreover, he warned, the resulting market downturn would lead to higher unemployment and home foreclosures.
"Credit is the lifeblood of our economy," Bernanke reiterated in response to repeated questions about the economic impact on the average taxpayer.
Before testifying at Wednesday's hearing, Paulson faced a lot of criticism for his role in the Federal Reserve takeover of Freddie Mac and Fannie Mae, as well as the takeover of American International Group earlier this month, but he stayed firm in front of the committee on his decisions, insisting that "these steps have all been necessary but not sufficient."
Paulson reiterated that he was asked to come to Congress without a completed plan on Saturday, and that the oversight and transparency Congress has repeatedly called for were things he believed should be included in the legislation "without undermining the effectiveness of the proposal."
Shays, in a press release, said, "I believe we can't cut a $700 billion check to Treasury without strong oversight of this plan, and will be actively engaged in the debate on how to balance emergency relief with significant transparency and accountability."
Also of concern to members of Congress on Wednesday was the worry that the American public remains in the dark on the details of the crisis itself. Several congressmen called for President Bush to further explain the situation to the country.
In control of legislation now are House Financial Services Committee Chairman Barney Frank, D-Mass., and Senate Banking, Housing and Urban Affairs Committee Chairman Christopher Dodd, D-Conn., who have pledged to work with a bipartisan group to address all issues raised at the hearings as quickly as possible.
Shays, a member of the Financial Services Committee who is facing a tight race in November, said he would like to see Congress vote on the legislation by early next week.
But, he said, "I don't even think about the impact that this would have on the upcoming election, and I'd like to think that my opponent wouldn't either. The issues at hand are just too important."