Senate Dems Release Their Bailout Plan
The Post's Lori Montgomery reports on the Democrat-controlled Senate bailout proposal:
The Senate Democrats' plan calls for the creation of an emergency oversight board composed of the Fed, FDIC and SEC, plus two outside experts appointed by Congress. It also calls for the Treasury secretary to make monthly reports to Congress, including financial statements.
Treasury would have to report every Friday on the plan, publicly stating the total value of assets purchased during the week and the total value of assets held.
Like the House proposal, the Senate plan contains the same language about restricting executive compensation as the House does. It also would require the Treasury to attempt to reduce the number of foreclosures by rewriting bad mortgages and forgiving a portion of the debt.
Unlike the House proposal, the Senate plan completely rewrites the Treasury's bailout language, placing new conditions on the types of assets Treasury may purchase and new requirements on what it must receive in return. For example, the Senate plan would require any firm taking advantage of the bailout to give the Treasury "contingent shares" equal in value to the price Treasury pays for their assets.
The provision is intended to help ensure that taxpayers will recover their money.
The Senate proposal also contains many details likely to anger Republican lawmakers, which could bog the measure down. For example, while some Republicans have asked that any profits from the sale of the assets be dedicated to deficit reduction, the Senate proposal would set aside 20 percent of any profits on each sale for Democratic priorities, such as an affordable housing fund.
The Senate plan would also require Treasury to implement a program of "systemic homeowner assistance" through which the mortgages underlying purchases assets can be modified to help homeowners avoid foreclosure.
The Senate proposes to sunset the program on Dec. 31, 2009 -- one year sooner than Paulson proposed -- unless the Treasury secretary can persuade Congress that an extension is necessary.
The Senate proposal also would direct the Government Accountability Office to complete a study by June 2009 that explores what role the Fed, the Treasury Department, the SEC and banking regulators played in the meltdown, and whether federal regulators failed to use their powers to "curtail excessive leveraging."
All three major Wall Street markets are now down, with the Dow off 196 points.
Please email us to report offensive comments.
Posted by: Anonymous | September 22, 2008 12:26 PM
Posted by: CarolBG | September 22, 2008 12:54 PM
Posted by: Patriot3 | September 22, 2008 12:56 PM
Posted by: Andrea D Hussein Davies | September 22, 2008 1:10 PM
Posted by: John | September 22, 2008 1:11 PM
Posted by: Dwight | September 22, 2008 1:12 PM
Posted by: Stand Firm, Dems. | September 22, 2008 1:15 PM
Posted by: Fer | September 22, 2008 1:18 PM
Posted by: Michael English | September 22, 2008 1:25 PM
Posted by: Verdict still out | September 22, 2008 1:26 PM
Posted by: manny | September 22, 2008 1:31 PM
Posted by: thinking long term | September 22, 2008 1:31 PM
Posted by: ConLaw | September 22, 2008 1:38 PM
Posted by: pmc | September 22, 2008 1:39 PM
Posted by: Brian | September 22, 2008 1:39 PM
Posted by: Hajji | September 22, 2008 1:40 PM
Posted by: Anonymous | September 22, 2008 1:49 PM
Posted by: RK, Gaithersburg | September 22, 2008 2:15 PM
Posted by: john | September 22, 2008 2:59 PM
Posted by: CarolBG | September 22, 2008 3:42 PM
The comments to this entry are closed.