Members of Congress will spend this weekend discussing alternatives to a $700 billion bailout of the troubled financial sector of the economy proposed last week, said U.S. Rep. Peter Roskam, R-6th District, of Wheaton.

Roskam held a phone conference Friday afternoon with Chicago-area reporters to discuss negotiations over stabilizing financial markets impacted by the subprime mortgage crisis. He said his constituents do not want Congress to rubber-stamp a plan that gives so much money and such sweeping authority to a federal agency.

“If you’re advocating the position that you want $700 billion of taxpayer money, the burden is on the proponent of that idea. So far, the proponent has not met that burden,” Roskam said. “I remain unconvinced by the Paulson plan, and I believe my constituents are as well.”

Backed by President Bush and Federal Reserve Chairman Ben Bernanke, U.S. Treasury Secretary Henry Paulson last week proposed a plan that would permit the federal government to buy “toxic” assets from struggling financial institutions. The government would hold the assets until the economy began improving and then sell them.

“Obviously, we were presented with a plan several days ago. It was presented as a done deal,” Roskam said. “When you’re talking about $700 billion, my constituents asked me to see that every option is explored short of a taxpayer bailout. ... I’ve heard from some economists, and they’ve urged us to pause on this and to look at it carefully.”

One plan being considered by congressional Republicans is increases the resources of the Treasury Department and Federal Reserve and permitting them to extend loans to banks. This would give financial institutions more time to pay back loans while the markets stabilized

Roskam said. It also would allow the banks to differentiate between those assets that are in jeopardy and those that are performing well, giving a more precise picture of how much money is at risk, Roskam said.

“I’ve never been given an answer on why $700 billion was needed, in all do respect; it’s so staggering,” Roskam said. “Has every market-driven option been explored? Not yet.”
While Roskam is hopeful that a plan can be settled over the weekend, members of Congress have a few weeks to work with if need be, he said.

Check out Jerry Moore's blog, Suburban Shoutout, for more information on Roskam's conference call.