The pace at which Congress is considering the largest intervention into financial markets in the history of the United States, if not the world, is shocking. Over the weekend, the Bush administration proposed legislation that would grant it the authority to buy up toxic financial assets in an amount equal to five percent of gross domestic product (GDP). The magnitude of the funds requisitioned is matched only by the administration's requested level of unchecked power and opacity in how it would execute this historic market intervention. Congress has responded with uncharacteristic haste, setting the stage for passage of monumentally flawed legislation that purports to fix a yet-undiagnosed problem in roughly one week. We do not pretend to know whether a bailout is needed or, if one is needed, what size and scope it should be. But most assuredly, rushed actions will result in quick fixes without resolving underlying problems. If economists and financial experts are correct in their assessment of the economy, Congress would be well advised to take a collective breath, slow down, and begin the process of study and deliberation that legislation of this historic magnitude deserves. If the economic crisis is as severe as Treasury Secretary Henry Paulson now indicates, Congress can wait an extra week before adjourning or return during the final weeks of the election season to address this issue. That Democratic leaders Harry Reid (D-NV) and Nancy Pelosi (D-CA) have neglected to mitigate the hysteria induced by an impending adjournment date that could easily be postponed is baffling and frustrating. After all, addressing national priorities is precisely why they were elected.

Paulson's initial request to Congress would have hid the actions of the Treasury from the sight of not only the public, but also from Congress and the courts. Sec 2(b)(2) of Paulson's legislative text would give his department authority to enter into contracts "without regard to any other provision of law regarding public contracts." Sec. 8 would make "[d]ecisions by the Secretary pursuant to the authority of this Act … non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency." Paulson has agreed to modify these provisions, but it is a clear indicator that the administration has its sights set on virtually unchecked authority — much like what happened after the 9/11 terrorist attacks.

Congress would be wise to ensure that significant oversight and accountability structures are in place. If Paulson or his successor can make unilateral decisions about contracts, for example, it will likely raise conflicts of interest. The firms most able to help the government dispose of toxic assets are likely the firms that are seeking the government bailout. Congress must be wary of ceding authority to a unilateral actor with no assurances of safeguarding the public from conflicts of interest.

Paulson's proposal would do what advocates and watchdogs of all ideological stripes abhor: it would socialize the risks (and bad decisions) of capitalism while privatizing the rewards. The Bush administration's toxic asset buyout program would purchase from financial firms and individuals assets that are now worth significantly less than the original purchase price. The plan calls for the government to relieve the financial industry of hundreds of billions (potentially trillions) of dollars of bad debt without receiving anything in return from these firms. Nothing. No one knows what the size or value of these debts will be. Progressives complain the taxpayers get no equity in the companies that created the bad debt; conservatives complain about government interference in the free market. This issue is at the crux of a major philosophical debate about the role of capitalism as this country moves into the 21st century.

Without attaching strings to a bailout, Washington would place an additional $2,000 of debt on the shoulders of each man, woman, and child in the country while encouraging the foolish and greedy decisions of Wall Street. It was the poor decisions of investment bankers that put the nation's entire economy at risk; it would be nothing less than immoral to enable and reward their reckless behavior as millions of Americans find themselves unemployed, losing their homes, and struggling to pay for food and electricity.

With nary a witness heard nor public forum entertained, the chair of the Senate Banking Committee, Christopher Dodd (D-CT), working with his counterpart in the lower chamber, chair of the House Financial Services Committee Barney Frank (D-MA), had started circulating the outline of the legislation his committee is likely to offer. However, Republican ranking member on the Senate Banking Committee, Richard Shelby (R-AL), sensing the imprudent manner under which Congress is responding to the administration, believes "Congress must immediately undertake a comprehensive, public examination of the problem and alternative solutions rather than swiftly pass the current plan with minimal changes or discussion." Dodd's contribution is substantively promising, and Shelby's warning is well warranted and should be heeded. While things are shifting quickly, if a bailout is to occur, the legislation must adhere to the principles outlined in a letter co-authored by ACORN and the Campaign for America's Future, to which OMB Watch has signed on.

These guidelines include the set of principles that should be followed whenever Congress intervenes in the market:

• Ensure proper oversight will be conducted over the intervening agency
• Protect the taxpayer by ensuring that the federal government not only assumes the risks of a bailout, but also shares in the benefits
• Maintain a sensible regulatory framework under which assisted firms and individuals conduct business
• Hold individuals accountable for their irresponsible behavior

In addition to these guidelines, consideration should be given to aiding individual citizens who continue to struggle to stay in their homes. Above all, Congress must conduct its deliberations transparently and be wary of potential conflicts of interest of those that seek to influence the legislative outcome.

It was only four days ago that Paulson asked Congress to pass legislation that would allow his department to use $700 billion to purchase mountains of bad debt. That's five percent of the nation's total economic annual output, or to put it another way, that's even more than what has been spent on the war in Iraq. With so much riding on the decisions and actions that our leaders are about to make at this pivotal moment in our history, every American deserves more than five days of Congress's time. Perhaps now, more than any other time, elected officials, particularly Congress, need to do more than prop up our expectations with short-term solutions. Instead, they should develop a clear understanding of all the components that led to this crisis. Only then will proposed reforms have lasting impact and ensure this type of problem is not allowed to happen again. Let's hope our leaders make the prudent decision to slow the process down and devise a wise policy solution that benefits our entire society.