Paulson, Bernanke to brief lawmakers on turmoil

WASHINGTON (Reuters) - U.S. Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke will meet with congressional leaders late on Thursday to discuss efforts to quell the Wall Street crisis, according to congressional aides.

Federal Reserve Board Chairman Ben Bernanke (R) and Treasury Secretary Henry Paulson testify at a hearing of the House Financial Services Committee on Capitol Hill in Washington, July 10, 2008. REUTERS/Jonathan Ernst

The meeting, at the request of Paulson and Bernanke, was called just hours after Republican and Democratic lawmakers complained for the second consecutive day that the administration was not consulting with them on the matter.

Aides said the topic for the meeting, which is set for 7 p.m. (2100 GMT) in the office of House Speaker Nancy Pelosi, was to explore ways to stem mounting financial turmoil, the aides said.

The briefing comes amid speculation the Bush administration is looking at a Wall Street rescue package.

According to sources, Paulson has been considering establishing a federal agency to deal with broken mortgage debt instruments that are choking off new investments and threatening global markets.

Earlier on Thursday, House Minority Leader John Boehner of Ohio, complained that a closed-door meeting of his fellow House Republicans was canceled when no member of the administration showed up to discuss the government bailout of insurance giant American International Group that was announced this week.

“They have to talk to these guys up here,” a senior Senate Republican aide said. “If they don’t there is going to be a drip, drip, drip of complaints.”

The aide questioned what input lawmakers would actually have on any administration plan to stem the crisis.

“Paulson will do what he has to do,” the aide said. “Paulson is the expert on this. I don’t see very many members having much input on this,” the aide said.

But the type of broad changes Treasury reportedly is considering would most likely require legislation to be approved by the Democratic-led Congress.

“We’re not going to be fully satisfied until they (Paulson and Bernanke) are before a committee answering our questions -- not just dictating what they are going to do,” said a Democratic leadership aide.

Both are scheduled to testify at a pair of hearings next week.

Reporting by Thomas Ferraro and Richard Cowan; Editing by Eric Walsh