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2.7%  Q1 GDP    4.57%  avg. 30-year mortgage     9.5%  Unemployment

Dodd: "Fundamental Agreement" Reached on Bailout Bill

Democratic and Republican members of the Senate Banking Committee and the House Financial Services Committee emerged today from a meeting in the Capitol on a $700 billion package proposed by the Treasury Department and the Federal Reserve and said they have reached agreement on most of the issues dividing them.

Sen. Christopher J. Dodd (D-Conn.), chairman of the Senate Banking Committee, said the negotiators reached "fundamental agreement" on a set of principles to guide the financial rescue plan and that Congress could pass a bill within days.

"I now expect we will indeed have a plan that can pass the House, pass the Senate and be signed by the president and bring a sense of certainty to this crisis," Sen. Robert F. Bennett (R-Utah), the top Republican on the panel, told reporters.

UPDATE 2:14 pm:

Rep. Spencer Bachus (R - Ala.), the ranking Republican on the House Financial Services Committee, denied reports that there was an agreement.

"There is no deal yet," Bachus, who has been involved in the negotiations, told reporters.

--Bill Branigin and Paul Kane

By Sara Goo  |  September 25, 2008; 2:14 PM ET
Categories:  The Ticker  
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Next: Bailout Money To Be 'Phased In'

Comments

I wonder if McCain has even ARRIVED in DC yet? I mean, geez, how could we have reached a resolution without his guidance and leadership?

I wonder what the new excuse will be for the debates being canceled?

Posted by: BlueBear | September 25, 1908 1:33 PM | Report abuse

McCain resolved this just my saying he was going to resolve this. Now that is effective leadership.

Posted by: Bill J | September 25, 1908 1:35 PM | Report abuse

finnaly we are getting closer to some sense of closure! Hopefully this will allow some type of oversight on the 700b package to ensure that the funds are administered appropriately. lets see what kind of assurance will be givien to the average american in regards to overall security!

Posted by: Anonymous | September 25, 1908 1:35 PM | Report abuse

Good. I'm glad they reached an agreement before McCain's plan materialized and he managed to take credit for something he had no involvement in

Posted by: Craig | September 25, 1908 1:35 PM | Report abuse

Thank God McCain was there to save the day! Oh, wait: he wasn't?

Posted by: tom | September 25, 1908 1:36 PM | Report abuse

Great news!

Cancel the White House photo op, and move forward to the debate on Friday.

Posted by: Phxflyer | September 25, 1908 1:36 PM | Report abuse

Now McCain will have to find some other excuse to "bail out".

Posted by: dataflunky | September 25, 1908 1:38 PM | Report abuse

Now we can sit on our hands nervously waiting to see how badly the Democrats caved into the White House again.

Posted by: VerbalKint | September 25, 1908 1:39 PM | Report abuse

But will taxpayers ever get to see all the contracts and other deals Paulson makes? Will there be complete transparency? I doubt it.

Posted by: infuse | September 25, 1908 1:39 PM | Report abuse


They said they AgREED IN PRINCIPLE....that is FAR FROM A REAL AGREEMENT.

I will believe it when it is signed and sealed.

Additonally, Americans should be told the complete details before any deals are signed.

Posted by: Obama stop talking start doing!!!! | September 25, 1908 1:41 PM | Report abuse

well hooray for our socialist leaders in washington.Has anyone wokeup and decided to vote third party yet or are still going to be sheep and wait for the next fleecing?

Posted by: pooty | September 25, 1908 1:41 PM | Report abuse

HAND OVER THE MONEY OR I'LL BLOW THE PLACE UP!
----------------------

Well, lookit here buddy
You want to be like me
Pull out your six-shooter
And rob every bank you can see
Tell the judge I said it was all right
Yes!
/Bob Dylan/

Posted by: Theorizing | September 25, 1908 1:41 PM | Report abuse

Richard Shelby is the ranking member on Senate Banking, not Bennett.

Posted by: KS | September 25, 1908 1:41 PM | Report abuse

What we need comprises several sub-points:

1. Separation of the forms of debt.

a. We should "bail out" all debts in college loans, and all debt extended to private individuals which was issued on the basis of excellent credit, for example people who have paid off a first mortgage and are seeking s second to run a rental property, for example.

b. "Probably Bad Debt" (mostly from the mortgage and mortgage-backed and deriviative markets) should be bailed out only as a last resort and should be bought for no more than 30 to 40 cents on the dollar. This prevents overfunding of declining inflated "bubble" value covering. It also utterly prevents anyone making bad bets in the mortgages market from ever making a cent on it in any way.

c. The taxpayer needs equity on all assumptions of debt, either "good" or "bad".

2. The government needs to create a fairly immense "interbank credit covering fund". This would be separate and apart from everything else. This will allow banks to lend to each other and be assured that the credit will travel in both directions.

3. Oversight needs to be deep and wide. Creation of a new specialist agency with nearly plenipotentiary investigative and authoritative powers is probably required.

4. We should see the development of a new agency that has only one major and one minor mission. The major mission is to defend the value of taxpayer
equity in the bailout. The minor mission will be to reinvest that money in such a way that pays dividends. The taxpayer could select on a quarterly basis how much to re-invest dividends to grow their equity, or to pay out cash. The taxpayer would have a "basic inalienable stock" in the treasury agency underwriting the bailout. That couldn't be transferred, seized, or awarded, and would always pay dividends provided the fund behind it was properly managed.

Posted by: Thomas Hardman | September 25, 1908 1:41 PM | Report abuse

Great news? You partisans deserve what you are getting! This 700 billions will be gone by the time Bush leaves office! Prepare to pay in the form of higher cost for everything including taxes under president Obama.

Posted by: Anonymous | September 25, 1908 1:43 PM | Report abuse

McCain is probably still driving down I-95 from New York at 40 mph with his left turn signal on in the left lane.
Neither his ideas nor presence was sought , wanted or required by the folks who had been working on this for days. Why would they want someone who claims --accurately --to not know much about economics and who 10 days ago thought the "fundamentals of the economy are strong" creating any more of a circus than he already had? The "maverick" was going to get a deal done? There's a reason a maverick is seen --and not trusted -- by either side.He is an ally to no one but himself.This cynical old fool--McCodger-- acted so impulsively that he demonstrated the hotheadedness so many of his colleagues are concerned about , but don't talk about publicly.

Posted by: jmsbh | September 25, 1908 1:43 PM | Report abuse

Let me guess what a couple of the components will be.

* A claimed limit on executive corporate salaries - enough to appease the public, but easy enough to get around once the media heat is off. Like, OK his corporate salary is limited to 5M, but later turns out he got appointed on 12 "unrelated" do-nothing board memberships at 1M a pop. Story on page 14.

* Some real reforms and limits - an attempt to return these gambling houses to the investment institutions they claim and are chartered to be. And which will, as always, be repealed, unenforced, or let sunset once the economy picks up - letting the high-margin, leveraged profits soar, setting up the middle-class taxpayers again to take the next fall.

Posted by: True Info | September 25, 1908 1:44 PM | Report abuse

PLEASE, NO VOTE UNTIL THE DETAILS (ALL)
HAVE BEEN MADE PUBLIC AND THE CITIZENS
HAVE A CHANCE TO VOICE THEIR OPINIONS
AS LOWLY AS THEY MAY BE VIEWED BY THOSE
SAYING WE MUST DO IT NOW.

BUSH SAID WE ARE IN DANGER.
HE SAID THE SAME THING ABOUT IRAQ.
IN MY OPINION HE HAS VERY LITTLE
CREDIBILITY.

SENATORS AND REPRESENTATIVES:
PLEASE POST YOUR E-MAIL ADDRESSES AND DO AN OPINION POLL ON THIS COURSE OF ACTION
" BEFORE " VOTING.

YOU GUYS ARE THE ONES WHO FELL ASLEEP
AT THE WHEEL, DON'T EXPECT US TO RUSH.

Posted by: PATRICK KELLIHER | September 25, 1908 1:44 PM | Report abuse

One thing we've learned this this whole process...

McCain is willing to roll up his sleeves and work with Republicans and Democrats to fix this economic crisis.

Obama wants to hear himself talk.


If you weren't sure who to vote for before, it's pretty clear.

Vote for the WORKER....not the guy with the BIG EGO

Posted by: Fix the Economy NOW..forget the Debates | September 25, 1908 1:44 PM | Report abuse

Who cares about smokescreen political banter right now (not to disrespect any of the previous commenters, but we have to stop being sucked into the bubble of deception. The next President has already been chosen. Us "voters" will find out soon enough who that individual is. However, this is eerily reminiscent of the days leading up to Congress approving funding for Iraq....not an economist, but I strongly believe that real culprits of this situation (and there are many)- will walk away having received little more than a wink or side-eye glance for creating the circumstances which has gotten us to where we are. All things are connected and there are no accidents in the world of Washington politics. The lawmakers, bankers, regulators are all in bed together.... Until the day when the will of a people united against corruption and lies brings about a New Amerika, the struggle for what is true and just continues.......

Posted by: Who Cares | September 25, 1908 1:45 PM | Report abuse

McCain will surely insist on delaying a debate ( which is about foreign policy - not even the economy!) until the ink is dry on all the signatures of the bailout. (You have to wonder who even WANTS their name on that bill!

Posted by: rebas | September 25, 1908 1:45 PM | Report abuse

HOORAY! Oh Praise be to Allah, Brahma, The God Of Abraham, Jesus, Buddha, Shiva, and assorted other deities! We have been saved! Oh bless thee benevolent rulers! May your seed be multiplied in the land, and your name become a blessing. O Bliss! O Glory, Glory Hallelujah! And to all a good night! On Dancer, on Prancer! There can be only one! We have overcome Satan in this, the last battle betwixt good and evil! Paradise has been delivered by YHVH-Elohim into thine hand!

HOORAY!
HOORAY!
HOORAY!

Posted by: Democracy | September 25, 1908 1:47 PM | Report abuse

McCain showed initiative and leadership. His being in DC made this deal possible by getting Republicans who were opposing the bill on board. Once again, McCain shows himself to be A DOER, while Obama is a TALKER.

Posted by: Tony V, Chicago, IL | September 25, 1908 1:52 PM | Report abuse

Yeah get on with the debate! Obama was no debate champ if I remember correctly. He was like a school boy against Hillary. And Hillary was pulling punch for fear of offending certain segment of the Democrat constituency she would need!

I can easily envision McCain making Obama look like a school boy again. He won't be pulling punch that's for sure.

Posted by: Anonymous | September 25, 1908 1:52 PM | Report abuse

MCCAIN = ACTION
OBAMA = GOOD SPEECH

Posted by: Anonymous | September 25, 1908 1:54 PM | Report abuse

Fine, buy them all. Cut up the companies into their useful/good bits. Sell them immediately. Repay our treasury - again immediately. Problem solved. Except those who can't really afford mortgages won't be able to get them and that is what is normal.

(And yes, I want this all done ASAP - preferably before the election but definitely by mid-December!! They have shown they can make big things happen quickly - let's see that speed now.)

Posted by: rebas | September 25, 1908 1:59 PM | Report abuse

"No one has said that this bailout will resolve the crisis." - Alan Meltzer

Posted by: tokogasy | September 25, 1908 2:01 PM | Report abuse

So how is McMoose gonna turn this deal into a big splash for himself? I don't know but I can't wait to see him try to upstage the Democrats. What a fake...

Posted by: Vince, Jupiter, Florida | September 25, 1908 2:02 PM | Report abuse

Buy what? These are toxic debts nobody else will touch! This is a transfer of wealth from main street to Wall Street. Pure and simple. Consider that money gone.

No not really gone. You all will be stuck with the IOUs.

Posted by: Anonymous | September 25, 1908 2:03 PM | Report abuse


Congress does not have the power to transfer this much power to the Executive Branch, without amending the Constitution. This bailout of Wall Street robber barons is a massive restructuring or our government and financial systems that should not be made without modifying the Constitution.

This move will change the entire power relationship between the Congress and the Executive Branch, as well as the power relationship between American citizens and our government. To give governmental powers and obligations to financial institutions over our populace is clearly outside of the realm of the Constitution.

There is no sunset provision on many of the main powers granted by this legislation and thus these powers will become a permanent change to our government.

Let's face the truth and respond accordingly. The same political sellouts in Washington, DC who have been giving big business and liberal social agendas anything they want have been doing the same behind the scenes by removing most of the laws and regulation management on that level as well.

Over the last ten years they have removed or ignored most of the regulations that were put in place to assure another great depression never happened again.

They are desperate for more power and money to delay the inevitable and to assure that your average American citizen takes on most of the burden! Including bailing out foreign banks that are in the U.S.!

So, we have a President with approval ratings in the low 20 percentiles rushing out to ask a Congress with a 9% approval rating to give them unprecedented powers, amnesty from oversight and court prosecutions, and another 700 Billion+ dollars guaranteed by the taxpayers and the full force of the American government to extract that money and interest from us all. They have made slaves of us!

They say the power and funds must be delivered within days to avoid a global economic meltdown that will have dire consequences for us all.

It's a shame to think that there are many Americans left in our nation who believe a word of what comes out of the mouths of any of these traitors in the Bush administration. Politicians in Washington, DC are fearful of losing their jobs if the true economic consequences manifest BEFORE election day, instead of after, and thus the politicians give the appearance of doing something huge.

First, there is no assurance or even likelihood that this unprecedented bailout and amnesty for Wall Street traders will work. They have already thrown hundreds of billions of dollars of your money into bailouts for Barons, Fannie Mack, Fanny May, and AIG. The 700B+ more they claim they need this week is probably what they estimate is needed to prevent the collapse till after Nov 4, 2008 which is election day.

The requested bailout bill would establish unprecedented powers for the Executive Branch to keep borrowing large sums, many analysts believe that the true costs could range between 1 to 5.5 Trillion dollars of your money!

They want the power to designate private financial companies and banks "as financial agents of the Government, and they shall perform all such reasonable duties related to this Act as financial agents of the Government as may be required of them" (Sect. 2-B-3).

Upon passage of this legislation, going to the bank will be similar to going to the DMV, tax offices, or any government agency. The banks will be more under the control of the Executive Branch and inversely your bankers will be your government. MORE FREEDOM TAKEN AND BIG BROTHER WATCHING!!

The secretary will be allowed to buy and sell mortgage securities and then use the funds from any sales to pay for administrative costs and other measures in this program, instead of returning the funds to the taxpayers.

The real kicker is found in Section 8, where it reads "Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency."

No more power and money in exchange for their failures!

Let the financial chips fall where they may and let the market corrections occur and if the consequences for the American public are dire, let us shift through the ashes and rubble of their greed and the excess created to determine how and why this happened. Let Congress use their investigatory power to launch inquiries to determine who should have their assets seized and who is going to prison for this treachery.

This monopoly game is over. It is time to enforce the rules and start over. It is time for many of those in high places to go to jail!

--------

Posted by: Anonymous | September 25, 1908 11:32 PM | Report abuse

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