Paulson Criticized for ‘Flailing About’

Posted November 26, 2008 at 1:36pm

While Democrats are striving to craft another multibillion-dollar package aimed at jump-starting the economy, Treasury Secretary Henry Paulson is “flailing about” on how to spend funds from the $700 billion bailout Congress rushed to deliver to him, Rep. Debbie Wasserman Schultz (D-Fla.) said Wednesday.

Wasserman Schultz said when she voted last month to give authority to Paulson to dole out up to $700 billion to aid the flagging financial sector, she expected him to use the funds to address the issue driving the nation’s economic woes — by purchasing mortgages and helping people stay in their homes when facing foreclosure.

“Now he’s abandoned that plan and he seems to be flailing about a bit on where to inject capital into markets, and there is a little bit of a risk that the markets are going to become too dependent on that capital,” Wasserman Schultz said on MSNBC.

“I am concerned, I have to admit, that the Treasury secretary, Mr. Paulson, seems to be flailing about a bit,” she said.

Democrats aren’t the only ones critical of the administration’s handling of bailout funds.

House Republican Policy Committee Chairman Thaddeus McCotter (Mich.) said Tuesday that actions being taken by Paulson and Federal Reserve Chairman Ben Bernanke seem like a comedy act.

“We would have preferred not to see the ‘Who’s on First?’ routine between Secretary Paulson and Fed Reserve Chairman Bernanke because they seem to come by it naturally, whereas at least Abbott and Costello had to practice it to put forward that state of confusion,” McCotter told Fox News.

He reiterated that many Republicans would have preferred a free-market solution to the Wall Street crisis.

Echoing the message of her party leaders, Wasserman Schultz said Congress must pass a separate economic stimulus package as soon as Members return in January. House Appropriations Chairman David Obey (D-Wis.) is currently drafting that bill, which is aimed at creating 2.5 million jobs and will cost hundreds of billions of dollars.

Passage of a stimulus measure is President-elect Barack Obama’s “No. 1 priority,” Wasserman Schultz said. “Obama is inheriting a pretty huge mess that, you know, if we don’t focus on getting it turned around, then we’re going to really have an even worse problem.”