Paulson: No "Bailouts" For Reckless Lenders

03/28/2008 02:46 am ET | Updated May 25, 2011
  • MICHAEL M. PHILLIPS, GREG IP Wall Street Journal

The Bush administration is hardening its opposition to the chorus of Democrats, bankers, economists and consumer advocates calling for a big-money government rescue program for struggling homeowners.

In an interview yesterday, Treasury Secretary Henry Paulson branded many of the aid proposals circulating in Washington as "bailouts" for reckless lenders, investors and speculators, rather than measures that would provide meaningful relief to deserving, but cash-strapped, mortgage borrowers.

Mr. Paulson's comments came amid signs that the nation's housing market is getting worse, not better. Indeed, at a House hearing yesterday, Federal Reserve Chairman Ben Bernanke kept the door open to further interest-rate cuts to boost the economy, even as he warned that inflation pressures have intensified in recent weeks.

President Bush and other administration officials have voiced skepticism before about a major government effort to ease the burden of the nation's housing slump. But Mr. Paulson's comments are the most explicit to date in laying out the administration's opposition to the recent spate of rescue plans.

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