The bill will come

The U.S. Senate added enough goodies - most unrelated to fixing the mess on Wall Street- to the proposal giving the secretary of the Treasury $700 billion in taxpayer money to buy up bad paper from various financial institutions. More members of the House went along with "respectable" opinion when it came back for a second vote Friday and gave Hammerin' Hank Paulson his blank check.

After all, some tax credits are thrown in, and those are like catnip to Republicans. For liberals, there's a mandate to force insurance companies to cover mental health treatment the same as physical ailments. There's a new property tax deduction for nonitemizers, and bank deposit insurance is increased from $100,000 to $250,000. And to offset a fraction of all this there's a new tax on hedge fund managers.

It's still a plan that might end up accomplishing little other than running up our national debt. The notion that the financial sky will fall if the government doesn't borrow from our grandchildren to inject new funny money into dubious financial institutions is simply irresponsible fear-mongering. Such borrowing might give the impression of easing financial pain over the short run, but it only postpones and extends the pain.

Ohio's House delegation voted 10-7 against the bailout Monday, but the extras switched the vote to 10-7 in favor by Friday. Democrat Betty Sutton and Republicans Jean Schmidt and Patrick Tiberi switched their positions by week's end. Reps. Jim Jordan, R-Urbana, and Bob Latta, R-Bowling Green, again voted against the bailout.

Investment banks and Wall Street managers made some bad investments. They should have been forced to take their lumps, learn their lessons and move on. The more quickly it happens, the better. If some firms have to go bankrupt, so be it. That would be preferable to throwing $700 billion at the problem with no assurance - none at all - that it will actually work. The bailout might work by keeping the country from going into recession, but the extras thrown in on top of the $700 billion was insulting. If the bailout was as important as President Bush and congressional leaders of both parties said, it should have been the only thing up for vote.

The most encouraging news last week was that the Securities and Exchange Commission allowed more flexibility in the accounting rules, known as "mark to market," that contributed to the downward spiral. These rules specified that, if one bank sold a troubled asset at a fire-sale price, other banks had to re-evaluate their similar assets at that same price. This would reduce paper assets, triggering increased capital requirements, something more difficult to raise when you've just downgraded your portfolio - and so on.

The new rules will require banks to explain why they are not re-evaluating their assets at the fire-sale price to preserve transparency. Authorities from former FDIC Chairman William Isaac to economists at Princeton, Wharton and Harvard believe this simple change itself would alleviate a great deal of the credit crunch. Congress should have given it a chance to work before committing our grandchildren to this risky and undoubtedly unconstitutional bailout scheme.