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Bailout Deal Reached

September 27, 2008 - by Donny Shaw

<img src=“http://cache.daylife.com/imageserve/01mw3cc6vffpC/610×.jpg”align=“right” width=“340” height=“240”UPDATE 3: Here’s the bill:

Emergency Economic Stabilization Act of 2008 (pdf file)

And on PublicMarkup.org here, where you can read and leave comments on particular sections or the overall bill.

Calculated Risk is excerpting and posting key parts of the bill.

The House is scheduled to vote on the bill Monday and the Senate will do so on Wednesday at the earliest.

Original post below…

It’s 1 am on Sunday morning, and congressional negotiators have just announced a tentative deal on a bailout plan for the country’s troubled financial system – The Politico:

>House and Senate negotiators have reached tentative agreement on a financial rescue plan after a marathon Capitol negotiating session that started Saturday afternoon and stretched into early Sunday morning.
>
>House Speaker Nancy Pelosi (D-Calif.) and Sen. Majority Leader Harry Reid (D-Nev.) said their “breakthrough” still had to be “committed to paper,” a process that was expected to continue through the night.
>
>“We have something verbal,” said Rep. Rahm Emanuel (D-Ill.).
>
>Republican Whip Roy Blunt, the chief negotiator for House Republicans, said he was “looking forward to what we’re going to see on paper” and was optimistic that it would be something House Republicans could support.
>
>Said Treasury Secretary Henry Paulson: “We’ve been working very hard on this and we’ve made great progress toward a deal which will work and will be effective in the marketplace and effective for all Americans . . . .We’ve still got a lot to do to finalize it, but I think we’re there.”
>
>The plan would likely give Paulson a relatively free hand accessing the first $350 billion of the $700 billion he sought. It was not clear when the remaining $350 billion would become available, but Treasury apparently agreed that a future Congress could block its release though a joint resolution signed by the president.
>
>The agreement would also include much greater oversight than the Bush administration had initially proposed; an opportunity for the government to take an equity share in the companies it helps, either through warrants or options to buy stock; and a provision limiting the compensation paid to executives of those companies.
>
>To help win the support of House Republicans, the agreement also would likely include an option under which Paulson and future Treasury secretaries could choose to sell companies government-backed insurance to cover securities – thereby improving their value – rather than buy the assets as initially proposed.

We’ll update as soon as bill text is available.

UPDATE: Pelosi’s office has made available a somewhat vague summary of the draft proposal. Sill waiting for bill text…

UPDATE 2: From Rep. Roy Blunt, the chief negotiator for House Republican, a side-by-side comparison of the Paulson Plan, the Dodd and Frank plans, and the final compromise plan.

Still no bill text. Note this statement from Pelosi yesterday:

>Pelosi said she would like to see a deal struck by Saturday night that could be posted on the Internet for members and public to review.

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Comments

  • cj5 09/28/2008 5:50am

    This is an absolute outrage. Even with multitudes of people contacting their representatives, in opposition to this resolution, and yet it continues to move forward, without any regard for Constitutional process. The U.S. is run by a bunch of money hungry thieves. They are only interested in bailing each other out, instead of making it reasonable for the people to financially survive. Congress, you should be ashamed!

  • IronHeadTex 09/28/2008 8:00am

    WE THE PEOPLE,not you the “government” was blessed with this country by God not money. The United States was founded by succeding from the tyrant King of England, and at this point the “government” is no different. Give us true Americans the credit we deserve and listen to WE THE PEOPLE of the United States of America. I’ve experienced socialist Europe personally and I refuse to allow the UNITED STATES of AMERICA to go down this path. It is time to stand up to the bully, Pelosi and her posse. Let these greedy firms fail so that they can learn a lesson in consequenses and pay their dues just like WE THE PEOPLE have to do when we fail.
    NO BAILOUT FOR ANYBODY…..Government you credit rating is not strong enough to approve this loan. Try again in six months.

    May God have mercy on your souls if you pass this “bail out”.

  • JHENRY 09/28/2008 9:41am

    We are seniors struggling to support 3 grandchildren on a teacher’s retirement and our social security. Let the CEO
    of each and every company use their exorbitant salary and perks to bale out the company they caused to go bankrupt.

    We citizens have enough to contend just trying to keep our own finances taken care of for our own families let alone bail out these companies. This includes those who took out mortgages that they knew they could not pay back. We pay our bills on time and live within our means. Let those people suffer and perhaps they won’t be so greedy in the future. Do not even think of using any of this money to go to Golden Acorn or La Raza or any other organization. We tax payers don’t want or need to pay for someone elses greed.

    DO NOT PASS THIS BAIL OUT!!!

  • Anonymous 09/28/2008 5:54pm

    Do not vote for this bill. The people don’t want it, and think it is a nightmare.

    Stick withe House Republicans and vote against this bill.

  • Anonymous 09/29/2008 2:54am

    LIMITS ON EXCESSIVE COMPENSATION FOR CEOs AND EXECUTIVES
    For companies publicly auctioning over $300 million:

    No multi-million dollar golden parachutes for top 5 executives after auction

    No tax deduction for executive compensation over $500,000

    Penalizes golden parachutes for CEOs who are fired or have run the company into the ground

    For companies from which the government makes direct purchases:

    No multi-million dollar golden parachutes

    Limits CEO compensation that encourages unnecessary risk-taking

    Recovers bonuses paid to executives who promise gains that later turn out to be false or inaccurate

    THERE SHOULD BE NO COMPENSATION FOR CEOs AND EXECUTIVES. NO AT ALL. THIS IS A JOKE.THEY SHOULD TAKE A CUT IN PAY. FIRE THE ONES THAT CAUSED ALL THIS MESS. WE CAN STILL SEE WHO IS SLEEPING WITH THE ENEMY..
  • mhkid 09/29/2008 9:21am

    Listen, I agree that these institutions played fast a loose with things and got themselves into this situation, but realistically, things will get much worse if we allow them to completely fail. If you need a better example look at the Dow today after the vote failed. Down 4.7%

  • Freedom2Fascism 09/29/2008 2:10pm

    Wow for a change I see my rep voted with the people of his area…OMG! WE CANNOT allow anymore take over by this government…..YOU ARE RIGHT!! It is WE THE PEOPLE, not you the government….

  • Freedom2Fascism 09/29/2008 2:11pm

    THINGS

  • Freedom2Fascism 09/29/2008 2:13pm

    THINGS WILL GET MUCH WORSE NO MATTER WHAT, BUT WOULD YOU RATHER BAIL OUT THE RICH AND CONTINUE TO SUFFER? EVEN IF YOUR NOT SUFFERING AND YOU GOT A CUSHY JOB (80K) THINGS WILL GET BETTER BUT WE CANNOT SOCIALIZE THE ELITE, AND BAIL THEM OUT!!!
    THANK YOU TO MY REP FOR LISTENING FOR A CHANGE!!!

  • IronHeadTex 09/29/2008 2:59pm

    Thank God…I can’t believe that the bully Pelosi was shut down. When I was a kid I had a choice, get a whoopin or restriction from my friends. I chose the whoopin, get it over with so that I can move on with my friends. I live by that to this day. Restriction and control will just prolong the pain and keep things from moving forward. Allow these banks and companies fail and take the hit. Somebody will pick up the pieces of these failures and salvage the what is left and make it a success once again. That who we are as Americans. “Don’t Tread On Me”

  • Anonymous 09/30/2008 6:54pm

    What do you people think will happen to our entire ecomomic system if we let these companies fail, create outrageous unemployment,etc. Our 401K’s have taken enormous hits from this debaucle. We as a people must bite the bullet now!!! Work out the details and debate later. The boomers have been worked like stressed out dogs. Let us have an opportunity to recoup our health and work on things that will benefit society and our country. If we lose our 401k’s and social security bellies up this society will have an epidemic of homeless elderly like you have never imagined. THIS IS WHAT SCARES ME MOST!!!!!

  • Anonymous 12/10/2008 8:39am

    Here is the bottom line NO BONUS until the tax payers get paid back.

    Do your jobs (do them with good ethics) accept your pay and get on with life. You don’t deserve bonuses for doing your job.

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