Democrats say rescue plan needs safeguards

WASHINGTON (Reuters) - Congressional Democrats on Sunday supported quick approval for a $700 billion financial rescue plan but said it must include provisions to guard against potential abuses.

They expressed concern that the bailout program for Wall Street could expand the powers of the executive branch without adequate oversight, something Democrats have accused the administration of President George W. Bush of doing in the past.

"We're going to demand, as a coequal branch of government, accountability," Senate Banking Committee Chairman Christopher Dodd, a Connecticut Democrat, told reporters.

"How is this program being run? Is there transparency?" Dodd said. "The taxpayers want to know that and they have a right to know that."

U.S. House of Representatives Speaker Nancy Pelosi said that the Bush administration's bailout plan lacks "necessary safeguards" in several areas.

She said Congress will take action this week to protect taxpayers' interests and to ensure the plan includes "independent oversight, protections for homeowners and constraints on excessive executive compensation."

"We will not simply hand over a $700 billion blank check to Wall Street and hope for a better outcome. Democrats will act responsibly to insulate Main Street from Wall Street," she said in a statement.

Rep. Barney Frank proposed putting the bailout program at absorbing bad mortgage assets that have paralyzed the U.S. financial system under the oversight of the U.S. comptroller general, the government's main auditor, according to a document obtained by Reuters.

Democrats want to avoid a repeat of Bush, or anyone else in the executive branch, claiming new power with little, if any, congressional oversight.

Following the September 11 attacks, Bush secretly implemented a program of warrantless wiretaps, which he claimed he had the power to do. After the program was made public and under pressure from lawmakers, Bush moved to put it under the jurisdiction of the U.S. Foreign Intelligence Surveillance Court.

AIM FOR PASSAGE THIS WEEK

Democratic and Republican lawmakers said they hope to pass by the end of this week a version of the financial rescue package.

"We're 40 days away from a national election" for Congress and the White House, Dodd said on ABC's "This Week." "This issue supersedes an election. We need to get this right. We need to do it quickly, but also deliberately."

Appearing on the same show, House of Representatives Minority Leader John Boehner of Ohio voiced disgust with the financial turmoil and called for swift action.

"This isn't about Wall Street and it's not about commercial paper and all of the other nonsense you hear talked about," Boehner said. "It's about protecting our economy, protecting American jobs, their bank accounts, their retirement securities, their college savings fund."

Sen. Richard Shelby of Alabama, ranking Republican on the Senate Banking Committee, blamed "greed and lack of regulatory oversight" for the financial mess.

Also appearing on "Face the Nation," Shelby predicted there would be more such problems unless there is "tough regulatory reform in the next Congress."

(Additional reporting by Nancy Waitz, Kevin Drawbaugh and Mark Felsenthal; Editing by Cynthia Osterman)