Paulson says bailout protects taxpayers

WASHINGTON, Sept. 23 (UPI) -- U.S. Treasury Secretary Henry Paulson Jr. said Tuesday a $700 billion bailout plan would cost taxpayers less than allowing financial firms to fail.

Addressing the Senate Banking Committee, Paulson said, in a prepared statement released before the committee convened, he was "convinced that this bold approach will cost American families far less than the alternative -- a continuing series of financial institution failures and frozen credit markets unable to fund everyday needs and economic expansion."

The plan under debate in Washington is for the Treasury to purchase illiquid assets from financial firms. Critics have complained the bailout protects taxpayers from further unraveling of financial markets but doesn't provide them with enough rewards for the massive help provided.

Paulson said taxpayers would benefit from increasing "stability" in financial markets.

"The market turmoil we are experiencing today poses great risk to U.S. taxpayers," he said.

"When the financial system doesn't work as it should, Americans' personal savings, and the ability of consumers and businesses to finance spending, investment and job creation are threatened," his prepared remarks read.