The financial institution ''bailout'' plan Congress approved earlier this month was controversial enough in the form presented to Americans. Lawmakers indicated that they would go along with a $700 billion program most people thought was intended to buy ''toxic mortgages'' from financial institutions. Another $150 billion in ''sweeteners,'' many of them involving outrageous pork barrel projects, was thrown into the package.
But last week, Bush administration officials said they may use the $700 billion differently. They said they would begin purchasing ''stakes'' in major banks, instead of buying the bad mortgages from them.
That will pump money into the credit markets more quickly than buying up mortgages would have, according to Treasury Department officials.
But it is one more step toward socialization of the banking system. Instead of merely buying bad loans from the banks, the government now will be buying shares of stock in them.
We don't think that is what many lawmakers who voted for the ''bailout'' bill envisioned. Still, we doubt that many will object.
The new strategy, however, is worrisome in some ways. Conservatives in Congress should monitor it. If it appears to be giving the government too much influence in day-to-day banking, lawmakers should revisit their funding of the program.