Editorial: Bailout must hold recipients accountable (Burlington Free Press)

Congress must stand firm and extract powers of oversight and guarantees that those institutions which will benefit will be held accountable before approving the Bush administration's proposed $700 billion bailout of the financial industry.

As it stands, the bailout give too much unsupervised power to Treasury Secretary Henry Paulson Jr. that could have taxpayers holding a mountain of bad mortgages and other kinds of debt, leaving the firms, its shareholders and executives free to reap the benefits of public assistance.

The price tag for the bailout is stunning considering the wrangling Vermont's congressional delegation had to go through to get $2.5 million in federal heating assistance for the state that was already authorized. What other programs that serve ordinary Vermonters and other everyday Americans must be sacrificed in order for Washington to come up with the $700 billion?

Democratic proposals such as giving Congress greater oversight over the Treasury Department, giving more aid directly to homeowners and setting limits on pay for top executives of firms that receive government help all make sense given the astronomical commitment being asked of taxpayers.

Sen. John McCain, the Republican candidate for president, has proposed CEOs of firms that are bailed out be paid no more than the president of the United States who receives an annual salary of $400,000.

The Treasury should also seek equity more for the money than a pile of bad debt -- as was done in the savings and loans bailout in the 1980s -- so that the taxpayers share in any gains the companies realize from the bailout.

Congress and the administration must also look beyond the immediate crisis and work on restructuring the financial system to better head off crisis before government is again called on for a bailout. This is work that must be carried on by the next administration, regardless of who is in the White House come January.

If we are to use public resources to help companies that made billions of dollars and paid its executives million during a decade that saw the gap between rich and the rest of society widen, then we need something in return.

That something is a guarantee that the people who caused and profited from the current predicament will not benefit from the bailout, and that the financial industry and policy makers will do a better job of reigning in the excess before we find ourselves in another crises.