Paulson, Bernanke continue bailout sell

Today, the Bush Administration’s proposed $700 billion bailout could come under more fire on Capitol Hill.  Fed Chairman Ben Bernanke and Treasury Secretary Henry Paulson go before a House panel, a day after senators took them to task.

This is a full-scale administration push:  yesterday, while Paulson and Bernanke were out front, Vice President Cheney was making the bailout case behind the scenes.  But the pushback was at least as intense. 

Today, another grilling for the drafters of the historic bailout.

Many House lawmakers are wary.

Republican Florida Congressman Mike Pence said “there are those in the public debate who have said that ‘We must act now.‘ The last time I heard that I was on a used car lot.“

Fed Chairman Ben Bernanke warned senators of what no rescue would mean.

Ben Bernanke said “jobs will be lost, the unemployment rate will rise, more houses will be foreclosed upon.“

Alabama Republican Senator Richard Shelby said “I understand the situation is dire.“

Some lawmakers said expect changes to the bailout.

Democratic Connecticut Senator Chris Dodd said “almost any plan we’re gonna talk about is gonna deal with executive compensation, count on it.“

And frustration came from all sides.

Treasury Secretary Henry Paulson said “I think it’s embarrassing to the United States of America. There is a lot of blame to go around.“

Did fraud play a role?  The FBI is now investigating Fannie Mae and Freddie Mac, Lehman Brothers, and AIG for possible criminal activity.

Allegations too on the campaign trail.

CNBC confirms now bailed-out Freddie Mac paid $15,000 dollars a month through August to the lobbying firm run by John McCain’s campaign manager Rick Davis.

Davis denies he lobbied for Freddie Mac and McCain counts himself as a critic.

Sen. McCain said “I warned the American people about the lack of oversight, transparency, the backroom dealings and financial recklessness at Freddie Mac and Fannie Mae.“

Finally, a vote of confidence in the markets from Warren Buffett, who said he’s investing $5 billion in troubled Goldman Sachs.

Thousands of investors see Buffett as the ultimate in smart money.  His move could embolden some bailout critics here in arguing the market made the mess and the market will clean it up.