September 18, 2008 (LPAC) - As Lyndon LaRouche said tonight, we are in a hot situation. On the floor of the Senate today both Senator Charles Schumer and Senator Hillary Clinton addressed the ongoing financial collapse and put forth concrete proposals to deal with it in opposition to the proposals coming from Bernanke and Paulson in collusion with the Pelosi-Rohatyn crowd.

The outcome of the fight is not yet determined, but the fight has been joined. As Lyndon LaRouche put it, you have the Pelosi-Rohatyn faction on the one side and the human race on the other. So far it is a draw between the Pelosi faction and the human race.

In his speech today Charles Schumer explicitly called for the creation of a Reconstruction Finance Corporation (RFC), modelled on that created by Franklin Roosevelt, in opposition to the rival proposal for the creation of a Resolution Trust Corporation (RTC), which is being pushed by Henry Paulson among others.

Also, today Hillary Clinton made a series of proposals, prominently including the revival of another Roosevelt agency, the Home Owner's Loan Corporation (HOLC). The measures she proposed would curb manipulative trading practices, provide relief to homeowners facing foreclosure and reassert federal oversight. In an interview today on CNBC, former President Bill Clinton discussed Hillary Clinton's proposal to "go back to the Home Owner's Loan Corporation that was a product of the depression. That actually made a profit for the American people by stabilizing what was otherwise a disastrous run on the market for financing homes."

At 7 p.m. on Thursday night Paulson held a briefing with House Speaker Nancy Pelosi and other congressional leaders on his proposal. A Treasury spokeswoman confirmed that the meeting included Senate and House leaders from both political parties and that Fed Chairman Ben Bernanke accompanied Paulson. SEC Chairman Christopher Cox also attended the meeting.

We do not yet know precisely what occurred in this meeting. Treasury spokeswoman Brookly McLaughlin reported after the meeting that Paulson and Bernanke plan to work through the weekend with Congress, obviously with the Pelosi-Rohatyn faction of the Democratic Party, including Dodd, Frank and Rahm Emanuel, who Lyndon LaRouche identified as the pig on this.

Earlier in the day, the Republican Study Committee, a group of more than 100 conservative lawmakers released a letter asking Bernanke and Paulson to "refrain from conducting any additional government-financed bailouts for large financial firms. These massive federal bailouts have exposed taxpayers to literally tens of billions of dollars of new risk," and created a "moral hazard where companies are absolved, not punished, for excessive risk taking."

Lyndon LaRouche commented that this was a "sensible position," and that as a knee jerk reaction it was not too bad.

House Minority Leader John Boehner, an Ohio Republican told reporters today, that the Bush administration "refused" to send someone to Capitol Hill today to meet with the Republican Study Committee headed by Rep. Hensarling. "I am and all my colleagues here on the Hill are concerned about the lack of information, the lack of consultation that has occurred. We are a separate branch of our government. Members are entitled to information."

Upon hearing that the Bush administration refused to meet with his own party in the House, Lyndon LaRouche said: "Some people would call this a high level of corruption. You hate to accuse the President of fraud, because he may just be being stupid again. You have to give him credit for being stupid. He is not all there. Often you would think he was a cokehead the way he acts.

Now that the fight, which we have catalyzed, is on, the outcome will depend on the mobilization of the U.S. population by the LaRouche Political Action Committee.