Ex-banker Paulson faces snag in using public money to bailout banks

WASHINGTON, September 24, 2008 (AFP) – A battle over the US government’s financial rescue package heated up in Congress Tuesday, with top finance officials urging its swift passage and lawmakers digging in their heels.

Federal Reserve chairman Ben Bernanke and Treasury Secretary Henry Paulson, testifying to Congress after proposing the 700-billion-dollar bailout just days ago, argued that lawmakers must pass the emergency measure quickly or put the entire US economy at risk.

“What they have sent to us — this is not acceptable,” Senator Christopher Dodd, chairman of the Senate Banking Committee, told reporters after Bernanke and Paulson testified.

“A lot of reservations have been expressed this morning by Democrats and Republicans on this matter,” said Dodd, a Democrat. “This is not going to work.”

“They’re going to have to come back and work with us,” he said.

The two finance chiefs were to face more grilling Wednesday at a hearing of the House of Representatives Financial Services Committee amid rising opposition to what would be the largest government financial intervention since the 1930s Great Depression.

Democratic congressional leaders and some Republican colleagues have insisted th