$700 Billion Bailout plan/bill - First Draft is here…
Advertisements:Update: Sept 29, 2008: U.S. House Rejects $700 Billion Financial-Rescue Plan
As we all are waiting for $700 billion dollars wall-street bailout plan. Finally as I am writing, Democrats and Republicans just came up with initial draft. Its a first 106-page draft HR bill 3997 (Emergency Economic Stabilization Act of 2008, EESA - h.r. 3997) can be viewed at house.gov website AT financialservices.house.gov
Bailout = More tax?
Some key highlights are as below:
- Immediate step: $700 billion would be disbursed in stages. First $250 billion will be released immediately
- No Windfalls for CEOs and Executives: Tight regulations on the compensation of CEOs/executives of mortgage companies that sell assets to Treasury.
- New government department will be created for an oversight the plan. Oversight board includes Federal Reserve chairman, the Securities and Exchange Commission chairman, the Federal Home Finance Agency director and the Housing and Urban Development secretary.
- EESA establishes a program that would allow companies to insure their troubled assets. This includes an insurance program so bank and mortgage company can purchase an insurance to guarantee companies’ troubled assets and mortgage related products.
- Allow the Treasury the option of taking an ownership stakes
- Home ownership Preservation: This Plan allows Treasury to modify troubled mortgage- wherever possible to support and help families to keep their homes.
- Taxpayer’s money Protection: This one is very important, as far as I understand the legislation
requires mortgage companies and banks that sell some of their bad assets to the government to provide warrants so that taxpayers will benefit from any future growth these companies may
experience as a result of participation in this program. The bill also requires the
President to submit legislation that would cover any losses to taxpayers resulting from
this program from financial institutions.
Just to reminder that this is a first draft of the Bill. Current situation doesn’t guarantee to pass through house and US senate unless bill gets enough votes from both parties. Nancy Pelosi described the situation in simple words: “the party is over”. You can read bailout bill text AT House.gov website - financialservices.house.gov and thomas.loc.gov
You can also read summary of Bailout bill text/pdf file: SUMMARY OF THE “EMERGENCY ECONOMIC STABILIZATION ACT OF 2008”
Don’t Miss: (just in case if you want to read bailout plan in more details)
Emergency Economic Stabilization Act of 2008
Summary of Emergency Economic Stabilization Act of 2008
Section-by-Section of Emergency Economic Stabilization Act of 2008
Via [House Financial Service Committee]
Wall Street Bailout
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Nice blog.