Smith: ‘The proposal cannot be a blank check’

U.S. Sen. Gordon SmithU.S. Sen. Gordon Smith said Monday he would not support a bailout package for Wall Street without provisions in there for taxpayers and homeowners.

Following last week's turbulence in the nation's financial sector, President Bush and Treasury Secretary Henry Paulson had been calling for a swift bailout package, but Smith bucked the president and said he would not support any package that did not help American homeowners that had also been hurt in the crisis.

“This economic turmoil has threatened not just Wall Street, but also millions of people on Main Street,”  Smith said in a statement. “This proposal, however, cannot be a blank check that allows golden parachutes and executive compensation packages for bankers and investors that drove their companies into the ground potentially leaving taxpayers with generations of debt.”

On Friday, Smith released an economic plan that called for more oversight and accountability for the financial markets, and touted a bill he worked on with U.S. Sen. John Kerry (D-Mass.) that provided states with $11 billion bond to help subprime borrowers refinance their house.

“Years of poor regulatory oversight and lending practices has led to the current mortgage-related financial crisis. The panic that swept Wall Street last week cannot not be underestimated,” Smith said. “With Americans retirement plans, mortgages and financial security at risk, we must act now to bring order and stability to our markets."

Earlier in the day, Smith's Democratic opponent, state House Speaker Jeff Merkley called on Smith to support some sort of policy that will provide protection to homeowners and provide market reforms, instead of the “blank check” he saw the president advocating for.

"Republicans in Washington are demanding a blank check to fix the mess they created and that is completely unacceptable," Merkley said in a statement. "Real families are hurting in this economy and George Bush is only concerned about CEOs on Wall Street."

Smith agreed that families needed help, and said he would work with both parties in Congress to come up with a solution that helped homeowners and mortgage lenders.

“In the coming week, I will work in a bipartisan fashion to draft a package that will help to restore confidence in the American financial system and protect Oregon homeowners facing the loss of their home or retirement,” Smith said.