WASHINGTON – Congress should cut short its spring break to work on proposals this week that would tighten regulation of investment banks and help people facing foreclosure, a Republican senator said Sunday.
"On the economy, I think more has to be done," Pennsylvania's Arlen Specter said. "It would show that there is concern by the Congress that we're in this, too."
Congress began its vacation last Monday and is not scheduled to return until March 31. Over the past week, the Federal Reserve took its boldest action since the Great Depression to address the growing housing and credit crises and prevent other Wall Street firms from collapsing as Bear Stearns Cos. did.
The Fed engineered the sale of bankruptcy-headed Bear Stearns to J.P. Morgan Chase & Co. with a $30 billion loan; offered emergency loans to other securities dealers under terms normally reserved for regulated banks; and cut a key short-term interest rate by three-quarters of a percentage point.
Lawmakers from both parties say they want to move forward on proposals percolating since last November that would aid homeowners. There also are suggestions about restructuring oversight of financial markets.
For example, Massachusetts Democrat Rep. Barney Frank, chairman of the House Financial Services Committee, wants new rules for investment banks that would be similar to those covering regular banks.
Specter said it was "entirely likely once we sort it all out" that Congress might push for more significant oversight of Wall Street.
He said the $168 billion economic aid plan that Congress passed this year was inadequate to bolster the economy. If lawmakers returned to work this week and began acting on various economic proposals, it would have a "salutary effect," Specter said.
"I don't want to interrupt a lot of recess plans, but I don't think it would do any harm to go back to work on these issues, for Congress to do that," he said.
Sen. Charles Schumer, D-N.Y., said Senate Democrats planned to push a "modest, thoughtful" housing proposal when lawmakers returned. He said it would provide more counseling for prime borrowers and increase mortgage-revenue bonds so those on the edge of foreclosure would have something to refinance.
Sen. Jon Kyl, R-Ariz., said he and other Republicans might oppose some parts of that proposal, but could support the concept of restructuring the regulation of financial markets. The Treasury Department has been working on its own blueprint.
Specter appeared on CNN's "Late Edition," while Schumer and Kyl spoke on ABC's "This Week."