$700 Billion Bailout: Congress Unveils the Rescue Bill
From CNN, lawmakers release plan to enact historic bailout of nation’s financial system. Here are the details of the bill that stood out to me:
Doling the money out: The $700 billion would be disbursed in stages, with $250 billion made available immediately for the Treasury’s use. Authority to use the money would expire on Dec. 31, 2009, unless Congress certifies a one-year extension.
Protecting taxpayers: The ultimate cost to the taxpayer is not expected to be near the amount the Treasury invests in the program. That’s because the government would buy assets that have underlying value.
Stemming foreclosures: The bill calls for the government, as an owner of a large number of mortgage securities, to exert influence on loan servicers to modify more troubled loans.
Limiting executive pay: Curbs would be placed on the compensation of executives at companies that sell mortgage assets to Treasury. Among them, companies that participate will not be able to deduct the salary they pay to executives above $500,000.
Overseeing the program: The bill would establish two oversight boards.
The Financial Stability Oversight Board would be charged with ensuring the policies implemented protect taxpayers and are in the economic interests of the United States.
A congressional oversight panel would be charged with reviewing the state of financial markets, the regulatory system and the Treasury’s use of its authority under the rescue plan.
Insuring against losses: Treasury must establish an insurance program – with risk-based premiums paid by the industry – to guarantee companies’ troubled assets, including mortgage-backed securities, purchased before March 14, 2008.
The amount the Treasury would spend to cover losses minus company-paid premiums would come out of the $700 billion the Treasury is allowed to use for the rescue plan.
The “plan” sounds reasonable and fair – on paper. However, we all know what happens with government “plans” so I’m still a little skeptical. The devil is in the details and I want to know HOW they intend to implement. Specifically, HOW will they protect taxpayers, HOW will they modify troubled mortgage loans, HOW/WHEN are they are going to establish these “oversight” boards, and most importantly – with WHOM, WHAT is the evaluation criteria for compliance, and WHAT are the repercussions if things are not going as planned???
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SM, your sure have a dream :-) all these details you want to know right away!
When did you get something right away from govmt? Only tax forms that you need to fill out every year and send them your hard earned money.
To pass bailout was the easiest thing, the hardest thing is already inherently built in this bailout – how they are going to implement? it would probably take another few months to a year for them to figure this one out.
This
When did *I* get something right away from the gov’t? Never. But the gov’t has never passed a bill to spend $700 Billion in one fell swoop either!
If $250 Billion will be available for use immediately, it isn’t unreasonable to expect an implementation plan immediately. IMO, how you intend to implement should be required before one red cent is spent. Otherwise, you’re just blindly throwing good money at a bad situation. [-SM]
I’m still skeptical. And though I understand that income is relative, I’m still not pleased with a $500,000 cap on those guys’ pay. Maybe I’m just petty like that…
House just defeated the bill.
I’m skeptical about this whole situation. Just plain fishy. How could they not have seen this coming??? Ugh!! My 401K is slowly disappearing and I can’t touch it until Feb 2009. Double ugh!!
And can I just say that I do not like that Paulson guy one bit. He is extra creepy.
you know I was being sarcastic about the gvmt bailout, not about you wanting to know details