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Henry Paulson, head of Treasury, has decided that legislation to help homeowners with mortgage problems is too broad and will actually help bail out irresponsible people who were careless with their personal finances. It is the kind of perspective that a multi-millionaire former CEO of Goldman Sachs might have.

According to The Wall Street Journal "Treasury Secretary Henry Paulson branded many of the aid proposals circulating in Washington as "bailouts" for reckless lenders, investors and speculators, rather than measures that would provide meaningful relief to deserving, but cash-strapped, mortgage borrowers."

The chances that Paulson is right are better than 100%. No program as broad as the one the Administration and Congress are working on will be perfect. As a matter for fact, it will be very imperfect. Some people who should get money will fall between the cracks and rank speculators may end up getting assistance. That is the nature of programs from a government which serves over 300 million people. Paulson is no idiot. He knows that.

Paulson wants it to appear that the Administration is not after a program which will cost tax-payers any more than it has too. Saving money for the over-taxed and under-served is hard to fault, but a major fight with Congress will delay, perhaps for months, getting an aid package out the door. All of this happens as housing gets worse and defaults mount.

This is Paulson’s hour in the spotlight, his moment of fame. There will almost certainly be no larger challenge which he will face as head of Treasury. He has the chance to lead an initiative which could save millions of homeowners from losing their houses. By doing this he could also help troubled banks, bond insurers, and insurance companies which hold mortgage-related paper.

Paulson’s other option is to fight with Congress in the closing year of a lame-duck Administration and bollix up a chance to put a safety net under housing and, perhaps, the entire economy.

Paulson may be worried that the housing rescue plan will help some of the evil and irresponsible, but for the 99% of the people who genuinely need a hand his delay will deepen a disaster.

Douglas A. McIntyre