Obama vs. McCain -- 38 days to go. Economic Bailout Deal Approved.
The final product appears to be a genuine compromise stitched together from competing ideas, with House Republicans getting some - but not all - of their insurance-based proposals, which had nearly knocked talks off course, into the deal. Senate Banking Committee Chairman Chris Dodd (D-Conn.) and Budget Committee Chairman Kent Conrad (D-N.D.) said all major issues among the competing sides in the talks have been resolved.
- The $700 billion total would be broken into stages, with an immediate $250 billion made available to Wall Street, followed by an additional $100 billion released anytime at the request of the president, followed by a remaining $350 billion made available by Congress.
- Congress could disapprove the last $350 billion, but only through a disapproval resolution that would be subject to a presidential veto. There is no timetable for the remaining $350 billion, meaning that the entire $700 billion could be made available quickly and simultaneously.
- House Republicans' idea for an insurance pool to protect mortgage-backed securities = expanded to include other troubled assets - and funded by premiums on financial institutions is in the plan, supervised by Treasury officials who will set premiums. The program would be voluntary for companies.
- Taxpayer equity in the companies, intended to let taxpayers recover their investment as the companies recover.
- Executive pay limits intended to prevent "golden parachute" scenarios for the executives of failed companies.
- An oversight board would be established, with seats for the Treasury Department secretary, Securities and Exchange Commission chairman, Commerce Department secretary and Federal Reserve chairman.
- Bankruptcy provisions for which Democrats had fought hard are not in the plan. Known as "cram-downs," the provisions would have allowed bankruptcy judges authority to revise the terms of mortgages.
The proposed legislation is scheduled for a vote on Monday in the House. A vote in the Senate could take place as soon as Wednesday.
There is no indication that either Presidential candidate can claim real leadership on this measure. It may be that this is the last hoorah for President Bush, who sent a 3 page proposal to congress which resulted in a 110 page piece of legislation with key elements from both parties. Can anyone say bi-partisan? In the end, the political objective was to get everyone in the boat so that no one could claim credit nor cast blame for success or failure.
- The $700 billion total would be broken into stages, with an immediate $250 billion made available to Wall Street, followed by an additional $100 billion released anytime at the request of the president, followed by a remaining $350 billion made available by Congress.
- Congress could disapprove the last $350 billion, but only through a disapproval resolution that would be subject to a presidential veto. There is no timetable for the remaining $350 billion, meaning that the entire $700 billion could be made available quickly and simultaneously.
- House Republicans' idea for an insurance pool to protect mortgage-backed securities = expanded to include other troubled assets - and funded by premiums on financial institutions is in the plan, supervised by Treasury officials who will set premiums. The program would be voluntary for companies.
- Taxpayer equity in the companies, intended to let taxpayers recover their investment as the companies recover.
- Executive pay limits intended to prevent "golden parachute" scenarios for the executives of failed companies.
- An oversight board would be established, with seats for the Treasury Department secretary, Securities and Exchange Commission chairman, Commerce Department secretary and Federal Reserve chairman.
- Bankruptcy provisions for which Democrats had fought hard are not in the plan. Known as "cram-downs," the provisions would have allowed bankruptcy judges authority to revise the terms of mortgages.
The proposed legislation is scheduled for a vote on Monday in the House. A vote in the Senate could take place as soon as Wednesday.
There is no indication that either Presidential candidate can claim real leadership on this measure. It may be that this is the last hoorah for President Bush, who sent a 3 page proposal to congress which resulted in a 110 page piece of legislation with key elements from both parties. Can anyone say bi-partisan? In the end, the political objective was to get everyone in the boat so that no one could claim credit nor cast blame for success or failure.
Irma, your concern is closer to reality. This isn't a pretty picture, and there are few winners in the outcome of this mess. Worse, the biggest culprits are likely to get off without missing a beat. Sadly, a lot of well-meaning fokls are discovering what happens when "the market" is over lubricated with credit and paints a false picture of prosperity for the world.
The suffering at the bottom will get worse before it gets better. The real answer to this crisis will come 4 or 5 years from now, as you suggest. Then we will see how the recovery is structured to realign the global economy. This is our first experience in the "post-industrial economy" where consumption is the driver of all things economic. Credit is required to fuel that consumption. The question is, "What is going to replace good old fashioned labor and hard work?" This is not just an American problem. However, at this moment in history, the world is looking to America to come up with the solution. Only time will tell the complete story.