The congressional split over the Bush Administration’s $700-billion bailout plan for the U.S. financial system is showcasing some strong voices resounding with alternative ideas.

One alternative comes from Sen. Jim DeMint (R-SC), who sees the proper prescription to correct the breakdown in the system being pro-growth reforms like corporate income-tax reductions and capital-gains rate revisions. They would combine with reforms of government policies such as the Fed’s “easy money policy, the congressional charters of Fannie Mae and Freddie mac, and the Community Reinvestment Act.”

Getting more publicity has been the view of Sen. Charles E. Schumer (D-NY), who supports the plan presented by Treasury Secretary Henry Paulson in principle, but only with serious revisions. Sen. Schumer has floated two new ideas that he believes could shrink the $700 billion price tag, for example. He is recommending a revision that would grant the request in installments, rather than all at once. And he would defray part of the cost by assessing fees on major financial institutions. (That second element of Schumer’s idea seemed to win tentative approval from Paulson and Federal Reserve Chairman Ben Bernanke at yesterday’s hearing.)

Sen. DeMint’s reaction was that the bailout plan “does nothing to address the misguided government policies that created this mess and it could make matters much worse by socializing an entire sector of the U.S. economy.” He added, “This plan fails to oversee or regulate the government failures that led to this crisis. Instead it greatly increases the role for Secretary Paulson, whose market predictions have been consistently wrong in the last year, and provides corporate welfare for investment firms on Wall Street that don’t want to disclose their assets and sell them to private investors for market rates.”

DeMint said that most Americans have been responsible and are paying their bills on time. Rather, the plan would cause our nation to “fall off the debt cliff,” and could send the value of the dollar into a free-fall. He also fears that all the bailing out will lead other companies to seek similar help from the government.

“This plan may make things look better for Wall Street in the next couple months,” he said, “but the long-term consequences to our economy could be disastrous.”

As the reforms at the Fed, Fannie Mae, Freddie Mac, and others are being accomplished, he said, the tax and other changes designed to strengthen American business should also be installed. “We need to make permanent reductions in the corporate tax and the capital gains tax rates,” DeMint said. “We have the second highest corporate tax rate in the world, which encourages companies to take jobs and investment overseas.”

Across the aisle, Sen. Schumer proposed his serious fine-tuning of the administration’s bailout plan — built around fees to be levied on all large-sized financial market players. Those fees would shrink the $700-billion suggested cost, ne noted.

Schumer suggested that such fees — levied regardless of companies’ participation in the rescue program — could be used to bankroll an account similar to the Federal Deposit Insurance Corp.’s deposit insurance fund. He said that he would consider pushing such a proposal this week as Congress continues to consider the emergency legislation proposed by Paulson.

“One of the things I’ve thought about is whether we shouldn’t create an insurance fund similar to the FDIC for the whole financial system,” Schumer said at the hearing. “All firms over a certain size would pay, not small little community banks, but everything else. They would pay a fee, not too onerous or too large, but over time it could help to fray the cost of any losses that we might suffer.”

He acknowledged that the bailout, in part, will help the taxpayers. But he questioned why the taxpayer base should be the sole responsible party. Schumer noted how Paulson had indicated that he was indeed thinking of ways the private sector could be tapped to defray costs of the proposed rescue, as well as future costs. “One way, as you mentioned, would be some kind of broader, industry-wide tax,” Paulson responded to Schumer.

When Schumer asked Bernanke whether he would be open to creating such a fund, the Fed chairman responded: “Potentially, yes.”

Schumer said that his recommendation for installment payments on the $700 billion — perhaps $150 billion at a time — would allow the government to gauge the success of the asset-buying program before devoting more taxpayer dollars to it.

By adopting both the fee-based and the phasing-in approach, Schumer said, Congress could potentially come up with a plan having a substantially reduced price tag, with Wall Street and government sharing the taxpayer burden.

Whatever Congress decides, the decision much come promptly, Warren Buffett and others warn. The billionaire investor, who grabbed this morning’s headlines with his $5-billion plan to invest in Goldman Sachs Group, said on CNBC today: “I am to some effect betting on the fact that the government will do the rational thing and act properly. If I didn’t think the government was going to act I wouldn’t do anything this week.”