Paulson: Plan Still Leaves Taxpayers at Risk

Rescue proposal also won't save every financial institution
By Wesley Oliver,  Newser Staff
Posted Sep 21, 2008 10:55 AM CDT
Treasury Secretary Henry Paulson acknowledged that his proposal to prop up the financial markets by purchasing devalued mortgage debt won't save every institution.   (AP Photo/J. Scott Applewhite)
camera-icon View 1 more image

(Newser) – Treasury Secretary Henry Paulson, knee-deep in negotiations to save the floundering US finance industry, had a grim warning for Americans today: “There are no guarantees, and the taxpayer is at risk,” Paulson told Fox News Sunday, adding, “The concern I have is for the American people and the economy”—and Wall Street isn’t totally safe either.

“We're not doing this to protect our financial institutions in and of themselves,” he said. But the Treasury secretary noted that while Washington will spend $700 billion to buy devalued mortgages, it will recoup much of its initial investment by reselling the assets. “I hate the fact that we have to do it,” Paulson said, "but it's better than the alternative.”