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Deity
Los Angeles, CA, USA
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Feb 1999
time: 23:46
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No, really. What does it mean? How does it work?
The plan was supposed to have been posted on the Congressional website, but I can't log on. So I'm guessing the site has crashed. 
CNN says the $700 billion will be disbursed in stages, with $250 billion available immediately. What are we buying? From whom?
There's a dampner provision on CEO salaries, i.e. only the first $500,000 will be tax deductable. I'm not finding anything re the banning of "golden parachutes," and the provision was voted down that would have extended a bankruptcy judges power to re-write interest rates for residences (the way they can for vacation homes and yachts).
They're be an oversight board, consisting of the Fed chairman, the SEC chairman, the Director of the Federal Home Finance Agency, and the Secretary of HUD. CNN does not mention any congressional oversight.
The Treasury Secretary MAY establish the insurance program (a demand by House Republican). But I can't tell what assets are being insured, by whom, against what.
The reporting on the bill has really been amateurish.  The reporters appear to have too much hair gel and not enough brains.
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Emperor
Ontario, Canada
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Nov 1999
time: 02:46
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I don't think the "plan" has been put into writing yet. From what I gather the principles have been agreed upon and now it's time to construct the Bill.
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Deity
Los Angeles, CA, USA
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Feb 1999
time: 23:46
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I understood the committees would be voting on it today; it would be posted today at noon; and the House and Senate would vote on it possibly on Monday...but no later than Wednesday.
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DRoseDARs
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Emperor
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Jul 2002
time: 23:46
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quote:
Originally posted by Wezil
I don't think the "plan" has been put into writing yet. From what I gather the principles have been agreed upon and now it's time to construct the Bill. |
quote:
$700B rescue plan finalized; House to vote Monday
By JULIE HIRSCHFELD DAVIS, Associated Press Writer
WASHINGTON - Congressional leaders and the White House agreed Sunday to a $700 billion rescue of the ailing financial industry after lawmakers insisted on sharing spending controls with the Bush administration. The biggest U.S. bailout in history won the tentative support of both presidential candidates and goes to the House for a vote Monday.
The plan, bollixed up for days by election-year politics, would give the administration broad power to use taxpayers' money to purchase billions upon billions of home mortgage-related assets held by cash-starved financial firms.
Flexing its political muscle, Congress insisted on a stronger hand in controlling the money than the White House had wanted. Lawmakers had to navigate between angry voters with little regard for Wall Street and administration officials who warned that inaction would cause the economy to seize up and spiral into recession.
A deal in hand, Capitol Hill leaders scrambled to sell it to colleagues in both parties and acknowledged they were not certain it would pass. "Now we have to get the votes," said Sen. Harry Reid, D-Nev., the majority leader.
The final legislation was released Sunday evening. House Republicans and Democrats met privately to review it and decide how they would vote. "This isn't about a bailout of Wall Street, it's a buy-in, so that we can turn our economy around," said House Speaker Nancy Pelosi, D-Calif.
The largest government intervention in financial markets since the Great Depression casts Washington's long shadow over Wall Street. The government would take over huge amounts of devalued assets from beleaguered financial companies in hopes of unlocking frozen credit.
"I don't know of anyone here who wants the center of the economic universe to be Washington," said a top negotiator, Sen. Chris Dodd, chairman of the Senate Banking, Housing and Urban Affairs Committee. But, he added, "The center of gravity is here temporarily. ... God forbid it's here any longer than it takes to get credit moving again."
The plan would let Congress block half the money and force the president to jump through some hoops before using it all. The government could get at $250 billion immediately, $100 billion more if the president certified it was necessary, and the last $350 billion with a separate certification — and subject to a congressional resolution of disapproval.
Still, the resolution could be vetoed by the president, meaning it would take extra-large congressional majorities to stop it.
Lawmakers who struck a post-midnight deal on the plan with Treasury Secretary Henry Paulson predicted final congressional action might not come until Wednesday.
The proposal is designed to end a vicious downward spiral that has battered all levels of the economy. Hundreds of billions of dollars in investments based on mortgages have soured and cramped banks' willingness to lend.
"This is the bottom line: If we do not do this, the trauma, the chaos and the disruption to everyday Americans' lives will be overwhelming, and that's a price we can't afford to risk paying," Sen. Judd Gregg, the chief Senate Republican in the talks, told The Associated Press. "I do think we'll be able to pass it, and it will be a bipartisan vote."
A breakthrough came when Democrats agreed to incorporate a GOP demand — letting the government insure some bad home loans rather than buy them. That would limit the amount of federal money used in the rescue.
Another important bargain, vital to attracting support from centrist Democrats, would require that the government, after five years, submit a plan to Congress on how to recoup any losses from the companies that got help.
"This is something that all of us will swallow hard and go forward with," said Republican presidential nominee John McCain. "The option of doing nothing is simply not an acceptable option."
His Democratic rival Barack Obama sought credit for taxpayer safeguards added to the initial proposal from the Bush administration. "I was pushing very hard and involved in shaping those provisions," he said.
Later, at a rally in Detroit, Obama said, "it looks like we will pass that plan very soon."
House Republicans said they were reviewing the plan.
As late as Sunday afternoon, Republicans regarded the deal as "a proposal that is promising in principle, but that is still not final," said Antonia Ferrier, a spokeswoman for Missouri Rep. Roy Blunt, the top House GOP negotiator.
Executives whose companies benefit from the rescue could not get "golden parachutes" and would see their pay packages limited. Firms that got the most help through the program — $300 million or more — would face steep taxes on any compensation for their top people over $500,000.
The government would receive stock warrants in return for the bailout relief, giving taxpayers a chance to share in financial companies' future profits.
To help struggling homeowners, the plan would require the government to try renegotiating the bad mortgages it acquires with the aim of lowering borrowers' monthly payments so they can keep their homes.
But Democrats surrendered other cherished goals: letting judges rewrite bankrupt homeowners' mortgages and steering any profits gained toward an affordable housing fund.
It was Obama who first signaled Democrats were willing to give up some of their favorite proposals. He told reporters Wednesday that the bankruptcy measure was a priority, but that it "probably something that we shouldn't try to do in this piece of legislation."
"It's not a bill that any one of us would have written. It's a much better bill than we got. It's not as good as it should be," said Democratic Rep. Barney Frank of Massachusetts, the House Financial Services Committee chairman. He predicted it would pass, though not by a large majority.
Frank negotiated much of the compromise in a marathon series of up-and-down meetings and phone calls with Paulson, Dodd, D-Conn., and key Republicans including Gregg and Blunt.
Pelosi shepherded the discussions at key points, and cut a central deal Saturday night — on companies paying back taxpayers for any losses — that gave momentum to the final accord.
An extraordinary week of talks unfolded after Paulson and Ben Bernanke, the Federal Reserve chairman, went to Congress 10 days ago with ominous warnings about a full-blown economic meltdown if lawmakers did not act quickly to infuse huge amounts of government money into a financial sector buckling under the weight of toxic debt.
The negotiations were shaped by the political pressures of an intense campaign season in which voters' economic concerns figure prominently. They brought McCain and Obama to Washington for a White House meeting that yielded more discord and behind-the-scenes theatrics than progress, but increased the pressure on both sides to strike a bargain.
Lawmakers in both parties who are facing re-election are loath to embrace a costly plan proposed by a deeply unpopular president that would benefit perhaps the most publicly detested of all: companies that got rich off bad bets that have caused economic pain for ordinary people.
But many of them say the plan is vital to ensure their constituents don't pay for Wall Street's mistakes, in the form of unaffordable credit and major hits to investments they count on, like their pensions.
Some proponents even said taxpayers could come out as financial winners.
Gregg, R-N.H., said: "I don't think we're going to lose money, myself. We may — it's possible — but I doubt it in the long run."
___
On the Net:
House Financial Services Committee: http://financialservices.house.gov/
House Speaker's Office: http://speaker.gov
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Emperor
Ontario, Canada
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Nov 1999
time: 02:46
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Why you quoting me?
Released Sunday evening. That's within the last half hour.
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Deity
Lurking occasionally
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Mar 2003
time: 23:46
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We'd be 10x better off with $700bn. We should riot.
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Emperor
Ontario, Canada
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Nov 1999
time: 02:46
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quote:
Originally posted by DRoseDARs
Are you having a stroke or something? From my time frame, you posted at 3:24pm, from yours it would be 6:24pm. I posted the article 8 minutes later. It's a three hour difference between us, but the minutes are the same. The AP article was already circulating when you posted, which means the bill had already been "put into writing" earlier this afternoon from your time frame, midday from mine. |
When was a deal reached, when was it released and what were they doing in the meantime? My guess? They were cobbling together the final draft.
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Emperor
orangesoda
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Nov 2001
time: 00:46
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It means both McCain and Obama are dumber than Bush. Cause this will be good for a few months bump on the stock market. Long enough for one of them to take over holding the bag for Bush.
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Darius871
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Emperor
Smith, Wesson, and the RODINA!!!
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Mar 2002
time: 01:46
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Just read most of it; oversight, parachutes, mortgage modification, etc. all aside, this will clearly be a direct purchase, without loans and with insurance being only something Paulson "may" do (read: can but won't) for "some" assets. I'll be very surprised if House Republicans back this as written. Or McCain for that matter (his statements have been fairly inconclusive even today).
Last edited by Darius871 on 29-09-2008 at 01:02
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Deity
of Rocks.
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Sep 2001
time: 23:46
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I'd really like to know to gritty details.
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Deity
Los Angeles, CA, USA
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Feb 1999
time: 23:46
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quote:
Originally posted by Aeson
It means both McCain and Obama are dumber than Bush. Cause this will be good for a few months bump on the stock market. Long enough for one of them to take over holding the bag for Bush. |
It wasn't designed to give the market a bump. As I understand things, the credit markets are panicking and refusing to lend. This will cause fatal cash flow problems in other banks, and in many businesses. Supposedly, payrolls, etc. won't be able to be met. Credit cards will become invalid. Etc. At least, that the boogieman stories that are being used to justify this.
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quote:
Originally posted by Darius871
Just read most of it; oversight, parachutes, mortgage modification, etc. all aside, this will clearly be a direct purchase, without loans and with insurance being only something Paulson "may" do (read: can't but won't) for "some" assets. I'll be very surprised if House Republicans back this as written. Or McCain for that matter (his statements have been fairly inconclusive even today). |
Boehner is saying the House Republicans will back this according to the front page of CNN.com.
One wonders if the reports that the House Republicans were pissed that they weren't listened to at all during the drafting of the original bill were correct.
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King
of Meridian Hill, Washington D.C.
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Jul 1999
time: 02:46
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From CQ:
quote:
House to Vote Monday on Bailout Deal Despite Cool Reaction
By Benton Ives, Molly K. Hopper, Joseph J. Schatz and Jonathan Allen, CQ Staff
The House was set to vote Monday on a massive financial industry bailout as many lawmakers remained skeptical of the $700 billion deal reached with Treasury Secretary Henry M. Paulson Jr.
After a series of meetings Sunday, lawmakers praised, denounced or expressed uncertainty about the fragile compromise. The White House lobbied conservative House Republicans, who continued to be a vocal source of opposition, while House Democratic leaders worked to keep their members in line amid signs that many would vote ‘no’ as well.
Support in the Senate for the plan appeared to be broader among members of both parties, though opponents in the chamber are likely to slow its progress as long as they can.
House Majority Leader Steny H. Hoyer scheduled a vote on the agreement, which was reached early Sunday after marathon negotiations. The vote would begin the endgame of a tumultuous debate that reached from Capitol Hill to the White House, Wall Street, Main Street America and the presidential campaign trail.
“With these changes, I believe this is a plan a large majority of both parties can and will support. Now that we have broad bipartisan agreement, I intend to bring the final package to the House floor tomorrow for a vote,” Hoyer, D-Md., said.
But after House Democrats and Republicans caucused separately on the plan, many members emerged saying they were leaning against supporting it.
In the Senate, a Democratic leadership aide said Majority Leader Harry Reid, D-Nev., would likely have to move Monday to limit debate on the plan, setting up a Wednesday cloture vote.
Others held out hope a vote could be held sooner.
One of the negotiators, Sen. Judd Gregg, R-N.H., said “the Senate should vote tomorrow. Getting this done soon, promptly, is absolutely critical to the confidence of the markets and you can’t understate that issue.”
Reid later said: “As soon as we get this from the House, we’re going to move forward on it.”
The core of the plan would give the Treasury Department authority to buy up to $700 billion in troubled assets, mostly mortgage-backed securities, from financial institutions. The department would hold them and sell them at a later date, when the market stabilizes. But the program also would include conditions insisted upon by Democratic and Republican lawmakers, including parceling out the money in installments, limits on executive compensation and a government insurance plan, paid for by financial institutions, pushed by House Republicans.
House Opposition Vocal
With several key House lawmakers saying they would oppose the deal, it was unclear how it would fare in that chamber.
Rep. Mike Pence of Indiana, a member of the influential Republican Study Committee, said in a statement: “Republicans improved this bill but it remains the largest corporate bailout in American history, forever changes the relationship between government and the financial sector, and passes the cost along to the American people. I cannot support it.”
After a meeting with Minority Leader John A. Boehner, R-Ohio, and other GOP lawmakers, Rep. Todd Tiahrt, R-Kan., said it would be difficult to deliver a majority of the party’s House members for the deal as Speaker Nancy Pelosi, D-Calif., had demanded.
But later, as GOP lawmakers were caucusing, aides say Eric Cantor, R-Va., the chief deputy whip, and Paul D. Ryan, R-Wis., ranking Republican on the Budget Committee, pushed hard for “yes” votes. “This sucks that we are in this position. But we have to do this to save the free enterprise system,” Ryan told members, according to a participant.
The White House joined the lobbying campaign with a letter from Budget Director Jim Nussle to Boehner downplaying the plan’s cost. Boehner’s office released a similar letter from the non-partisan Congressional Budget Office.
“No one knows just how much these assets will sell for, but since 90 percent of mortgages are currently being paid on time and in full, we can expect a substantial payback on our investment,” Nussle wrote. “In some cases, if a mortgage asset is purchased at a deep discount from its face value, the taxpayer may even see a positive return on that investment.”
CBO echoed that view.
“Although it is not currently possible to quantify the net budget impact given the lack of details about how the program would be implemented, CBO has concluded that enacting the bill would likely entail some net budget cost—which would, however, be substantially smaller than $700 billion,” reads the letter from CBO to leaders of the House Budget and Financial Services committees.
More than 80 of the 199 House Republicans attended an unusually long closed-door meeting — a rare number because only half of the conference normally shows up at the weekly private meetings.
The leaders spoke for almost an hour. According to attendees, Boehner kicked off the program by recounting the fractious White House meeting on the issue Sept. 25, when House Republican leaders, backed by GOP presidential candidate Sen. John McCain, demanded that negotiators consider alternatives to the bailout plan if Congress was going to fork over $700 billion to stave off a financial crisis.
One participant described the tone of the conference as “respectful, but negative.”
A leading Democratic skeptic also suggested problems for the plan.
“If this is called for a vote on Monday, it’s very hard to predict,” said Rep. Brad Sherman, D-Calif., who drew some 35 Democrats to a meeting of what he dubbed the “Skeptics Caucus.”
But lawmakers belonging to the 49-member Blue Dog Coalition of conservative Democrats said they were pleased the draft legislation included a provision intended to raise money from companies that participate in the program if its full cost is not recouped within five years.
Rep. Jim Cooper, D-Tenn., said he plans to vote for the bill, warning that if Congress does not act the consequences for the economy will be dire.
“It’s not everyday you get a chance to save your country,” he said. “This may be one of those chances, nobody knows for sure.”
After a House Democratic Caucus meeting, Rep. Joe Baca said members were evenly split for and against the plan.
“Right now, I’m leaning towards ‘no,’” said Baca, D-Calif., pointing out that his constituents were pressing him to oppose it.
Majority Whip James E. Clyburn, D-S.C., said he was not sure how the bill would fare, but was not overly concerned about Democratic defections.
“It’s good to be skeptical about this. If anybody was sure about what we were doing, we wouldn’t be having all these discussions,” he said.
Senate Support
Senate Republicans appeared to be more firmly on board with the deal than their House counterparts. Republican Conference Chairman Lamar Alexander, R-Tenn., urged its quick passage.
“Congress should approve the amended plan without delay on Monday,” Alexander said in a statement. “Otherwise, there is a real risk that credit will freeze and Americans will not be able to get car, student, auto and mortgage loans or even to cash their paychecks.”
President Bush also urged lawmakers to drop their opposition.
“This is a difficult vote, but with the improvements made to the bill, I am confident Congress will do what is best for our economy by approving this legislation promptly,” he said in a statement.
Both presidential candidates cautiously welcomed the deal. Their views could influence many lawmakers as they weigh how to vote on the plan.
Sen. Barack Obama of Illinois, the Democratic candidate, said in a statement, “While I look forward to reviewing the language of the legislation, it appears that the tentative deal embraces” conditions on executive pay and other additions that Obama supported.
Appearing on the ABC news program “This Week,” McCain, R-Ariz., was asked whether he could support the plan. “Again, I’d like to see the details, but hopefully yes,” he said. “And the outlines that I have read of it, that this is something that all of us will swallow hard and go forward with. The option of doing nothing is simply not an acceptable option.”
McCain was at the center of drama and controversy last week, when he broke off campaigning and came to Washington as talks on the financial rescue plan were getting into high gear. He did not appear at the Capitol Saturday or early Sunday and did not have any direct role in the weekend negotiations over the final language.
Many Republicans say McCain earlier provided critical political impetus for House GOP lawmakers to become engaged in the process at a time when the vast majority of them were not inclined to support any of the bailout proposals.
But Democrats say he did more harm than good, complicating efforts to find a bipartisan resolution.
Exhausting Talks
Earlier, negotiators appeared exhausted but relieved at having reached a deal. Reid said a breakthrough came at about 11:40 p.m. Saturday, when Pelosi proposed an idea that moved negotiators closer to resolution. It was not immediately clear what Pelosi proposed.
“We’ve made great progress. We have to get it committed to paper so we can formally agree,” Pelosi said.
“We’ve made great progress toward a deal which will work and will be effective in the marketplace and effective for all Americans,” Paulson said at a hastily convened news conference on the House side of the Capitol just after midnight. “I think we’re there. . . . So far, so good.”
Reid had arrived at Pelosi’s office just before 10 p.m. Saturday as top Democrats conducted “shuttle diplomacy” back and forth with top Republicans and Paulson, who were working out of House leadership offices.
Senate Budget Chairman Kent Conrad, D-N.D., said negotiators had consulted with investment maven Warren Buffett by phone to gauge market reactions to the potential deal, though several key points remained under discussion.
Reid said staff had worked until 3 a.m. Saturday on the outlines of an agreement. By early afternoon, he said, “only a handful of issues — maybe a handful and a half” — remained to be settled by the bipartisan team of negotiators from the Senate and House.
David Clarke, Kathleen Hunter, Erin McNeill, Alan K. Ota, Liriel Higa and Catharine Richert contributed to this story.
First posted Sept. 28, 2008 11:54 a.m. |
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King
of Meridian Hill, Washington D.C.
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Jul 1999
time: 02:46
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quote:
CQ TODAY PRINT EDITION
Sept. 28, 2008 – 8:49 p.m.
Summary of Financial Legislation
By CQ Staff
According to one early summary, the financial bailout includes:
• Purchases of Troubled Assets. Authorizes the Treasury Secretary to establish a Troubled Asset Relief Program (“TARP”) to purchase troubled assets from financial institutions. Establishes an Office of Financial Stability within the Treasury Department to implement the TARP in consultation with the Board of Governors of the Federal Reserve System, the FDIC, the Comptroller of the Currency, the Director of the Office of Thrift Supervision and the Secretary of Housing and Urban Development.
• Insurance of Troubled Assets. If the Secretary establishes the TARP program, the Secretary is required to establish a program to guarantee troubled assets of financial institutions. The Secretary is required to establish risk-based premiums for such guarantees sufficient to cover anticipated claims. The Secretary must report to Congress on the establishment of the guarantee program.
• Considerations. The Treasury Secretary is required to take a number of considerations into account, including the interests of taxpayers, minimizing the impact on the national debt, providing stability to the financial markets, preserving home ownership, |
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Why the hell was everyone calling this a "deal" when they don't even have a sizable majority in the bag? Kinda defeats the purpose of the term if it's just a "proposal" by the parties' leaders. The vote debates tomorrow will be fascinating beyond measure.
