Paulson worried "bazaar open" on Senate stimulus bill

By David Lawder

Paulson, testifying before the Senate Budget Committee, said he did not want to spend money "that really isn't stimulus" as part of the approximately $150 billion spending package now under consideration in the Senate.

"I'm concerned if we see things that aren't stimulus and aren't going to get money to the American people quickly, we'll get bogged down." he added.

He reiterated that extending unemployment benefits, a provision backed by many Democratic senators, was unnecessary given the current 4.9 percent unemployment rate, which is low by historical standards. Further actions could be discussed with Congress if economic conditions worsen, Paulson said.

Paulson's comments drew the ire of Senate Majority Leader Harry Reid, who said he was "offended" by suggestions that the Senate was opening government coffers to special interests.

"I think Mr. Paulson's been hanging around the White House too long," Reid said. "He's not that kind of a man."

"I have engaged very actively with China. Engaged -- and I think with some results -- when you look the currency," Paulson told the Senate Budget Committee. "Don't be confused by the fact that I say I'd like them to move quicker, because I would like them to move quicker but their rate of appreciation of the currency roughly doubled last year to 6.7 percent."

He told the Senate Budget Committee that many countries now have lower nominal corporate tax rates than the United States and that other nations were not emulating the form of U.S. corporate taxes.

(Reporting by David Lawder; Editing by Jonathan Oatis)