Frank Calls House GOP Plan 'An Ambush'

House Financial Services Committee Chairman Barney Frank (D-Mass.) is blaming House Republicans for the collapse of talks over the economic bailout, saying that they came up a surprise proposal at the last minute.

"To our surprise, yesterday, the House Republicans came up with their own entirely now plan, and it is a -- an ambush plan," Frank said on CBS Friday. He added that no Republican who backs that plan had mentioned it to Treasury Secretary Henry Paulson or Federal Reserve Chairman Ben Bernanke during meetings about the proposed $700 billion bailout on Capitol Hill this week.

While the proposed bailout calls for government money to buy up bad mortgage assets, the Republican plan relies on private equity to create an insurance system for the firms with those assets.

Frank, Democrats and Senate Republicans have worked with the Bush administration on the bailout deal, but House Republicans have had held it up over objections to increased federal intervention in markets.

Frank blamed the GOP dissension for slowing progress on a rescue package, which its supporters said is needed to prevent a credit crunch and serious economic woes.

"I didn't know I was going to be the referee of the internal Republican ideological civil war," Frank said. "Look, you could have designed, in aspect, a better plan. But when you have a party in power, President Bush's people, and his top economic advisers, the head of the Federal Reserve and the secretary of the treasury say, look, we're going to be a crisis if you don't do this quickly."

In the same interview, Sen. Richard Shelby (R-Ala.), an opponent of the proposed $700 billion bailout, said that adopting it would be a "big mistake."

"It does nothing basically for the stressed mortgage payer," he said. "It does a lot for three or four or five banks, including foreign banks, and I have with me right here over -- a list of over 200 of the top economists in this country that say this structure, the Paulson plan, is a bad plan."

Shelby said that Congress has time to consider other plans.

"Well, let's say that we did nothing, the markets would correct themselves," he said.