( CNN ) -- At a hearing Tuesday before the Senate Banking Committee , federal officials said a bailout is needed immediately for the health of the U.S. economy . Sen. Christopher Dodd is chairing Tuesday 's hearing on President Bush 's proposed $ 700 billion bailout plan . Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke are urging the passage of a $ 700 billion bailout proposed by President Bush following the failure of financial institutions and frozen credit markets . The proposal , if adopted , would amount to the most sweeping economic intervention by the government since the Great Depression . Before the hearing , Sen. Christopher Dodd , a Connecticut Democrat who is the Banking Committee chairman , spoke Tuesday with `` American Morning 's '' Kiran Chetry about whether the bailout is the right option and what may have contributed to the tumultuous economic environment . Kiran Chetry : You know talk about waking a sleeping giant -- we have almost 2,000 blog posts on CNNMoney.com about this bailout alone . Many people are outraged about it . They feel the government is spending $ 700 billion or more to reward bad behavior . What can you do to assure people that this is the right thing ? Sen. Christopher Dodd : Well , I 'm not sure it is at this point . That 's why we 're having this hearing this morning . We 'll have Secretary Paulson and Ben Bernanke , the chairman of the Federal Reserve , before the banking committee to explain this plan , why it 's necessary and where we go from here . They basically have asked for a blank check of $ 700 billion for the next several years here to buy a lot of bad instruments out there in these institutions . See what power Paulson would have if the bailout is approved » . I have a lot of reservations . We 're trying to put some safeguards in it . I 'm angry as well . This did n't have to happen . It was not a natural disaster . It was a preventable , avoidable situation . We are where we are . Our economy is teetering . We 've been warned we 're very fragile . There could be a complete collapse . It needs to be straightened out or it could get worse . Pension funds , 401 ( k ) s , jobs could be in worse shape . Chetry : You have a revised version yourself . We 'll get into what you 're talking about . Do you believe that in general a bailout needs to happen ? Dodd : Something needs to be done here . I do n't know if it 's at this magnitude or if ... the specifics of this [ bailout plan ] make the most sense . But clearly something needs to be done . We ca n't lurch from one weekend to another with one failed institution after another watching our economy decline , stock market collapse and the price of oil rise . It 's not just our own country ; this has global implications . Chetry : Let 's look at some of the things you want added or in some cases taken out . Under your [ revised version of the bill ] , you feel there should be some foreclosure assistance -- if Wall Street is getting some help , Main Street should be getting help , too , especially for those struggling homeowners . You want limits on executive compensation . You do n't want CEOs to get millions of dollars in packages for a failed company . You talk about an oversight board over the Treasury . Why are these so important to include , and what if they end up costing more ? Dodd : Well , let me tell you why . First of all , we have almost 10,000 foreclosures occurring every day . For the last 18 months on a daily basis , I 've had 65 hearings since July of 2007 begging the administration to do something about the foreclosure problem . They admitted today if you do n't deal with 10,000 foreclosures a day -- that 's the bulk of these bad debts that are out there -- so you need to do something about that to stop the hemorrhaging . That 's No . 1 . No . 2 , I wo n't give a check for $ 700 billion , for 41 days , to this secretary or any secretary without safeguards built in -- accountability , transparency , oversight . That 's just not going to happen . Watch CNN 's Lou Dobbs discuss whether the bailout would work » . Thirdly , taxpayers deserve to be first in line in all of this . I 'm not going to write this at the end of the day [ and ] watch a handful of chief executives walk away with multimillion-dollar contracts . You 'll have people storming this building if we do n't understand that people are fed up with that kind of behavior . Chetry : You yourself said this is not a natural disaster , and a lot of people have been asking , `` Why did n't Congress see this coming ? '' In fact , this is a quote from Henry Paulson , the treasury secretary , back in July . This was during the time of the Fannie Mae and Freddie Mac bailout . People thought that was the beginning and the end of this . He writes : `` Remember our economy has got very strong long-term fundamentals , solid fundamentals . Your policymakers are here ; regulators were being very vigilant . '' How can the argument be made that they were vigilant when we see the bottom fall out of the market ? Dodd : Back in 2005 , [ then-Rep. ] Mike Oxley , along with [ Rep. ] Barney Frank and [ Sen. ] Paul Sarbanes , tried to do just that . The administration opposed the bill , and it was defeated on a party-line vote here in the Senate . I know the history very , very well . When you had cops on the beat not doing their job , basically an eight-year coffee break by and large . Where you had legislation on the books and legislation not being enforced . Where you had regulators sitting back as loans were being made with no documentation , luring people into subprime mortgages , predatory lenders taking advantage of the situation that 's how this all unfolded . It 's not a mystery . Chetry : ... I want to ask you is there anything in this bill ... to make sure this does n't happen again . All the things you listed -- the predator loans , everything that was taking place -- is there any room for regulation or more oversight in this bill ? Dodd : Probably not in this bill . We 're trying to act quickly . I 'm prepared to act quickly , but I 'm not going to act irresponsibly . If it takes longer , so be it . We 'll have a new election in 41 days , and a new secretary in a matter of five or six weeks , and we ca n't begin to guess who that might be . Turning over a check of this magnitude not only to this secretary , but his successor , I think would be the height of irresponsibility .
Sen. Christopher Dodd : `` We 're trying to put some safeguards '' in plan . Senator says he is n't sure bailout plan of this magnitude is right . Dodd : Situation is a result of lax enforcement of rules , documentation in past . Senator says lawmakers will act quickly but wo n't be irresponsible .