McClatchy: Bailout would come in stages that Congress could halt

Bailout would come in stages that Congress could halt

By Kevin G. Hall | McClatchy Newspapers


WASHINGTON — Congress and the Bush administration reached tentative agreement early Sunday on a sweeping $700 billion rescue plan to take bad assets off the books of banks and other financial firms. The deal is expected to be put on paper in the course of the day and sent to legislators for debate and a vote later in the week.

The two sides were racing a self-imposed deadline to get a deal by 6 p.m. Eastern time before Asian financial markets opened for business. A deal was announced in the wee hours by tired, puffy-eyed lawmakers that had been working almost around the clock to reach accord.

As lawmakers neared the tentative deal, staff members had their phones confiscated to prevent leaks in what had become a heavily politicized negotiation. Lawmakers pledged to post a copy of the deal online later Sunday for an angry American public to take a look at the compromise ahead of a congressional vote.

A tentative deal had been announced last Thursday, only to have House Republicans balk. The new compromise gives Democrats more restrictions on the pay of Wall Street execs and a taxpayer stake if the program actually makes money. Republicans tacked on a parallel insurance plan that can work as an alternative to taxpayer funding and killed provisions that would have let federal judges modify distressed mortgages.

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http://www.mcclatchydc.com/227/story/53189.html

the barn door one they have opened to their best and wealthiest benefactors.

??

I think this will be by taxing the financial sector after 5 years if all money was not recovered. Sound good in theory, but good luck with that...

The key ingredients are all there:

1. Paid in installments over a period of time.

2. As owner of MBS's, the government can "facilitate modifications for the mortgages themselves."

3. Oversight with a 5-year requirement to recoup funds from bailed out companies.

4. As yet "unspecified" restrictions on CEO pay and executive compensations.

5. Warrants allowing the government to share in any profits.

6. Judicial review.

Just one potential problem is the republican insertion of "a parallel insurance program that companies can choose instead of giving up their bad assets." This will probably be a new "back door" into the treasury with a sign over it saying, "criminal's entrance."

Isnt just more of the Credit Default Swap mess? AIG who provided 'insurance' failed. What makes them think an insurance program would work?

and they are happy in that place

It will also help people keep their homes.. but that is just one more useless fact... just like the 1930s, another useless factoid

Thanks for trying though

"Specifically, the proposed compromise envisions:

-- $700 billion in a taxpayer rescue of Wall Street, with $250 billion available immediately, another $100 billion upon report to Congress and the final $350 billion available only upon action by Congress."

Most people probably think that means Congress would have to approve another $350B later on. Not so. I saw an interview with Rep. Brad Sherman (D-CA) on MSNBC earlier and they asked him about this provision. He said it is extremely misleading. He said Congress would have to pass a resolution blocking that $350B and then they would have to override a veto by Bush which, of course, would not happen. It's complete BS and the part about the final $350B was put in the bill for the sole purpose of making it easier to sell to the public. It's nothing but a sham.

Sherman also described the bill as "$700B for George Bush in unmarked bills." He was going to vote against it.

He's still there until January. I have no doubt that this administration can easily piss away the first $350B long before then.