Lawmakers Balk at Bush Administration's Approaches to Financial Crisis

Republican and Democratic members of Congress lashed out the Bush administration as well as each other Thursday in increasingly explosive exchanges that cast blame on one another for Wall Street's recent meltdown.

Meanwhile, Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke were expected to meet with members of Congress from both parties at 7 p.m. at the Capitol, FOX News has learned. The exact purpose of the meeting wasn't immediately clear.

Lawmakers complained they have been sidelined as the administration bails out big money institutions, and argued that had they been involved the decisions may have been different.

This week, Lehman Brothers filed for bankruptcy protection, Merrill Lynch rushed into the arms of Bank of America and the Federal Reserve announced an $85 billion bailout of insurance giant American International Group, or AIG.

Irritated Republicans griped they were given little notice. Annoyed Democrats argued the financial crisis is not their fault.

"The cracks were showing as the value of mortgage-based securities slipped day by day by day. And the president and his supporters in Congress repeatedly chanted — and still chant the mantra today — that 'the fundamentals of our economy are strong,'" Sen. Hillary Clinton said, taking a stab at GOP presidential candidate John McCain who uttered those words to much criticism Tuesday.

"Republicans in the Congress feel like we could have had and should have had more information sooner," said House Minority Whip Roy Blunt of Missouri.

"Once again the Fed has put the taxpayers on the hook for billions of dollars to bail out an institution that put greed ahead of responsibility and used their good name to take risky bets that did not pay off," said Sen. Jim Bunning, a Republican from Kentucky.

Bunning has introduced a bill that would strip the Federal Reserve of its authority to use taxpayer dollars to bail out private companies like AIG.

"The only difference between what the Fed did and what Hugo Chavez is doing in Venezuela is Chavez doesn't put taxpayer dollars at risk when he takes over companies. He just takes them," Bunning said.

"I have said on more than one occasion that I don't think the Federal Reserve can handle the powers they have and this irresponsible bailout just proves my point," he continued.

Particularly peeved by the short notice given to House leaders about a private briefing Tuesday night by Federal Reserve Chairman Ben Bernanke and Treasury Secretary Henry Paulson, congressional leaders are proposing legislation that would give Congress a say in any bailout plan.

"They were not there asking us to do anything," Senate Majority Leader Harry Reid said of the briefing. "They were there telling us what they were going to do."

Lawmakers say they were taken by surprise by the Fed bailout of AIG, arguing Paulson had said just a day earlier that further bailouts were not on the horizon in the aftermath of the government's refusal to intervene to save Lehman Brothers Holdings Inc.

As the Wall Street crisis unfolded this week, Republicans and Democrats also turned their weapons on each other.

Reid and House Majority Leader Steny Hoyer on Thursday called Republicans "total failures" in legislating issue from health care to toy safety to housing to the financial markets.

"We need senators, House members and president committed to change," Reid said.

"Republicans were wrong on Iraq and they neglected Afghanistan where terrorism was launched against this country," added Hoyer.

In response, House Republicans blamed Democrats for the economic crisis, saying they used the wrong approach in dealing with housing giants Fannie Mae and Freddie Mac, both of which were bailed out earlier this month.

Senate Banking Committee Chairman Chris Dodd and House Financial Services Committee head Rep. Barney Frank "built up protectorates here on Capitol Hill around Fannie Mae and Freddie Mac," said Rep. Michelle Bachmann, R-Minnesota.

House Speaker Nancy Pelosi "has been very clear that this Congress has taken action to deal with the financial mess created by the Bush administration due to lack of oversight and responsible regulation," Pelosi spokesman Nadeam Elshami said in response to complaints.

As the Federal Reserve announced that banks and Wall Street firms have ramped up borrowing from its emergency lending program, Frank, a Democrat from Massachusetts, said he was shocked to learn Bernanke has the power to lend up to $800 billion. In the aftermath the AIG takeover, Frank said Congress would consider setting terms for future government interventions.

"It has to be done, I think, in a reasonable way in a democracy, with some criteria," Frank said. "It shouldn't be one man with $800 billion."