If the proposed $US700 billion bailout of the US financial system hits a snag, it will come from Congress adding provisions to the bill, urged on by US taxpayers outraged at the cost of the solution.
Democrats who narrowly control Congress have indicated a willingness to work hastily with the White House to pass the bill but a number have sought promises to fundamentally reform the powers of Wall Street after decades of deregulation. The fact that foreign banks would be able to unload their assets into the fund while thousands of Americans face foreclosures on their homes has only ratcheted up the emotion surrounding the bailout.
''If there is any 'pitchfork moment' - an episode that understandably would send people into the streets in mass outrage - it would be this,'' columnist Glenn Greenwald wrote on Salon, an online magazine. "Nobody really even seems to know how much of these losses 'the Government' - meaning working people who had no part in the profits from these transactions - is undertaking virtually overnight but it's at least a trillion dollars, an amount so vast it's hard to comprehend, let alone analyse in terms of consequences.''
Few disagree that the bailout is necessary to keep the markets working, even if the debate about the specifics widens in an election year in which the party faithful are already on war footings.
Democrats have begun to swap proposals with the Treasury in a bid to ensure any rescue plan balances Wall Street's interests with those of Main Street, while putting checks on the nearly unfettered power the administration sought for the Treasury secretary.
''Democrats believe a responsible solution should include independent oversight, protections for homeowners and constraints on excessive executive compensation,'' said California Democratic Representative Nancy Pelosi, the Speaker of the House of Representatives.
A list of proposed changes given to Treasury by the staff of the House Financial Services Committee sought limits on the compensation being paid executives of firms offloading assets, greater efforts to stem foreclosures, and oversight by the Comptroller General - the government's main auditor.
''It's ... hard to tell the average American that we're going to continue to have foreclosures that destabilize neighbourhoods and deprive cities of revenues they need, but we're going to buy up the bad paper,'' committee chairman Barney Frank said on CBS' ''Face the Nation.''
There was similar sentiment among Democrats in the Senate.
''We totally understand the gravity of the moment ... but you cannot just turn over $US700 billion of taxpayer money and not insist that the taxpayer is going to be protected,'' Senate Banking Committee chairman Christopher Dodd told reporters.
Democratic presidential candidate Senator Barack Obama has said $US700 billion cannot be a blank cheque, which many people accuse Treasury Secretary Henry Paulson and the White House of requesting, since the language used in the bailout is so simple.
''If we grant the Treasury broad authority to address the immediate crisis, we must insist on independent accountability and oversight,'' said Senator Obama in a statement. ''Given the breach of trust we have seen and the magnitude of the taxpayer money involved, there can be no blank check.''
Rival Senator John McCain, the Republican presidential candidate, has called for a cap on executive pay, as one of the conditions.
Outside of Washington, voices opposing an outright rescue package are gathering, with some portraying the Bush administration's handling of the War in Iraq and its response to Hurricane Katrina to its oversight of Wall Street.
Grassroots activist liberal group MoveOn.org has sent out a survey gauging the views of some of its 3.2 million member on the bailout issue.
The survey, which opens the door to possible pressure campaigns on Congress, also contains a link to former labour secretary Robert Reich's blog on which he suggest that in return for the $US700 billion, Wall Street executives should relinquish their stock options.
Mr Reich also floats the idea that the US government gets equity stakes worth the debt they cover and that bankruptcy judges may modify mortgages to ease the distressed borrowers' struggle to stay in their homes.
czappone@fairfax.com.au
BusinessDay, with Reuters
