WASHINGTON, Sept. 22, 2008
Bush, Lawmakers Rush Forward Bailout Plan
Agreement On Some New Terms Signals Movement In Talks Between White House And Congress
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Senate Democrats are pressing to insert relief for homeowners into the government's $700 billion investment bank bailout plan. (AP Photo/Nick Ut)
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"The whole world is watching to see if we can act quickly to shore up our markets," U.S. President George W. Bush said in a statement Sept. 22, 2008. (AP)
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Play CBS Video Video Bailout Plan Heads To Congress Critics of the Wall Street bailout plan want penalties for banks and relief for homeowners, Michelle Gielan reports. Harry Smith talks to Sen. Christopher Dodd, Senate Banking Committee Chairman.
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Video Eye On Feds' Bailout The Bush administration is asking Congress to speedily approve its $700 billion bailout plan. Although support is strong, some Dems want to help strapped homeowners too. Kimberley Dozier reports.
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Video Obama Focuses On Economy Barack Obama is focusing on the economy on the campaign trail. Meanwhile, John McCain is trying to shift the focus back to his strongest ground: foreign policy. Chip Reid reports.
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Interactive Inside The Fed A history of the Federal Reserve, glossary of terms and a look at changing interest rates.
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Interactive Eye On The Economy In-depth features on U.S. markets, taxes, employment and the Federal Reserve.
Unimpressed, investors sent stocks plummeting anew, pushed oil up $16 a barrel and propelled gold prices ever higher as they searched for a safe place to park their money.
President Bush prodded Congress to pass the administration's rescue plan quickly, declaring, "The whole world is watching." And there did seem to be movement in talks between the White House and Capitol Hill.
Rep. Barney Frank, D-Mass., chairman of the House Financial Services Committee, said "a great deal of progress has already been made." And a government official with knowledge of the talks said the administration had agreed to create a plan to help prevent foreclosures on mortgages it acquires as part of the bailout - a key demand of Democratic lawmakers.
Under the Democrats' plan, companies who participate in the bailout must agree to limit executive pay, bonuses, and severance packages, reports CBS News correspondent Bob Orr.
Wall Street barons are among America's highest paid, Orr reports. The CEO of Goldman Sachs last year made $70 million; his counterpart at JP Morgan made nearly $28 million; and the head of Merrill Lynch earned $24 million.
Under other additions the Democrats are asking to the administration package, according to a draft of the Congressional plan obtained Monday by Politico.com and The Associated Press:
The proposal by Sen. Chris Dodd, D-Conn., the Banking Committee chairman, would give the government broad power to buy up virtually any kind of bad asset - including credit card debt or car loans - from any financial institution in the U.S. or abroad in order to stabilize markets.
Dodd told CBS's The Early Show on Monday that taxpayers should be "first in line" to get money back once conditions in the industry stabilize and recover.
"We want oversight," he said, adding, "It's important that we act quickly, but it's more important that we act responsibly."
But it would end the program at the end of next year, instead of creating the two-year initiative that the Bush administration has sought. And it would add layers of oversight, including an emergency board to keep an eye on the program with two congressional appointees, and a special inspector general appointed by the president.
The plan also would require that the government get shares in the troubled companies helped by the rescue.
Wall Street didn't seem comforted. The Dow Jones industrials were down nearly 400 points near the end of the trading day.
Investors were uncertain just how successful the administration's plan will be in unfreezing credit markets, which many businesses depend on to fund day-to-day operations, and for propping up the still-weak housing market.
Congressional aides said the House could act on a bailout bill as early as Wednesday.
Bush said, "Obviously, there will be differences over some details, and we will have to work through them. That is an understandable part of the policy making process." But he also said, "It would not be understandable if members of Congress sought to use this emergency legislation to pass unrelated provisions, or to insist on provisions that would undermine the effectiveness of the plan."
The proposal that Dodd sent to Treasury Secretary Henry Paulson would let judges modify the mortgages of homeowners in bankruptcy to allow them to keep their homes.
It also would require that the government come up with "a systematic approach for preventing foreclosure" on the mortgages it acquires as part of the bailout. That would include the home loans held by Fannie Mae and Freddie Mac, the troubled mortgage giants now under the control of a government regulator.
Treasury spokeswoman Brookly McLaughlin said, "We are confident that we can get a bill done this week."
The fast-moving negotiations between the administration and Congress unfolded a day after the government approved a request by investment houses Goldman Sachs and Morgan Stanley to change their status to bank holding companies.
That change will allow the two venerable institutions to set up commercial banks that will be able to take deposits, significantly bolstering the resources of both institutions. It will also grant them permanent access to emergency loans supplied by the Fed rather than the temporary loan status they have had since last March when the Fed moved to prop up investment banks following the forced sale of Bear Stearns.
Frank said that lawmakers "are building strong oversight" into the new bailout measure.
"The private sector got us into this mess," he said, "The government has to get us out of it. We do want to do it carefully."
Republican presidential candidate John McCain, speaking Monday on NBC's "Today" show, said, "We are in the most serious crisis since World War II."
© MMVIII, CBS Interactive Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.
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- homeowners in foreclosure need to be given the option to lock in a low rate, have the mortgage insurance waived if they are over 80% ltv so they can afford their monthly payment. This would allow people to keep their homes even if the value is less than what their mortgage balance is. The presidents and ceo''s of the companies in trouble need to repay their bonuses back to the companies, and the brokers that made a fortune on these loans need to be made to repay some of the money they made. I worked in the sub prime mortgage industry and saw that with what was going on something bad would eventually happen. It was all about money and profits, not helping people.
- Reply to this comment
- Really? What part of "veto proof" escapes you? Posted by hungry1968-1 at 10:59 AM : Sep 23, 2008
MORON! So WHAT if his veto was overridden? At least he would be ON RECORD as opposing the measure.
But instead, he signed it. NOW HE''S AS MUCH TO BLAME AS THE REST OF THE SUPPORTERS OF THE MEASURE.
Face it - Clinton is as DIRTY AS MCCAIN ON THIS!!!
Don''t try to lie your way out of it. It only changes you from pathetic to evil when you lie. - Reply to this comment
- I HAVE INVESTED IN GOLD AND SILVER.
Posted by benice6 at 05:12 PM : Sep 23, 2008
I''d keep that to myself if I were you.
Last time we had this kind of economic distress, FDR made it ILLEGAL for private citizens to own gold.
All privately owned gold was CONFISCATED. - Reply to this comment
- I, (ON TOP OF HAVING A COLLEGE DEGREE);
GROW MY OWN FOOD,
HUNT MY OWN GAME,
STORE, SMOKE AND CAN MY OWN FOOD,
AND I HAVE INVESTED IN GOLD AND SILVER.
MEANWHILE,....MOST FOLKS HAVENT,..AND WILL BE PAYING ME $20 FOR A JAR OF PICKLES SOON, ANDMAY BE PIMPING OFF THE MOM OF THE FAMILY FOR A CAN OF TUNA TO FEED THEIR FAMILY SOMETHING TO EAT.
YES,..THE FUTURE IS GOING TO BE REALLY INTERESTING. XMAS SALES ARE ALREADY FORECAST TO BE DOWN 35%.
HA,..I''''''''VE BEEN PREACHING FOR YEARS THIS WILL HAPPEN.
NOT AT ANY OTHER POINT IN TIME HAVE SO MANY AMERICANS BEEN SO FAR REMOVED FROM HAVING THE KNOWLEDGE OF BEING ABLE TO GARDEN, HUNT & FISH , AND PROVIDE FOR THEMSELVES.
HA,..IT WILL BE A PLEASURE TO WATCH THE WALL STREET TYPES TRY AND USE THEIR ''''''''PAPER MONEY'''''''' TO BUY MY CAN OF BEANS THIS WINTER.
HA,..LET EM STARVE. - Reply to this comment
- Listen!! I dont care who wins this presidential election, Obama or McCain isnt going to clean up this financial mess in 8 years!!! are you kidding? in 8 years this wont even be america every country that owns a piece of america would taken its share by then!
- Reply to this comment
- 1999 WAS ON CLINTON''S WATCH.
Posted by txgrouch2006 at 10:34 AM : Sep 23, 2008
Indeed, by a GOP controlled congress and it was authored and pushed forward by Republicans.
Thankfully voters aren''t buying this ''blame Clinton for everything'' nonsense anymore. Polls show the blame falls mainly on the GOP (ya know, the ones who have controlled the White House the last eight years and Congress nine of the last twelve?'' including six plus years when they controled the House, Senate and the White House?)
But keep tilting at windmills if you like. It''s fun to watch. - Reply to this comment
- Posted by txgrouch2006 at 10:34 AM : Sep 23, 2008
Face it. You don''t have a clue. - Reply to this comment
- It''''s THAT SIMPLE.
Posted by txgrouch2006 at 10:34 AM : Sep 23, 2008
HAHAHAHAHA! You are hilarious! A typical bushite reaction... - Reply to this comment
- MY,MY...You are in denial aren''''t you?
Posted by leftyintexas at 10:16 AM : Sep 23, 2008
You Dems are the ones in denial.
1999 WAS ON CLINTON''S WATCH.
It''s THAT SIMPLE. - Reply to this comment
- Posted by hungry1968-1 at 10:12 AM : Sep 23, 2008
jamesm12341 is just as affected by these last eight disasterous years as the rest of us. He is delusional and in a constant state of denial... a common trait among bushites. - Reply to this comment
- YOU''''RE the Texass guy everybody makes fun of. You make ALL OF US look bad.
Posted by txgrouch2006 at 09:31 AM : Sep 23, 2008
You don''t need me to make YOU look bad. You''re doing a great job ALL BY YOURSELF! Hahaha! - Reply to this comment
- DON''''T BLAME BUSH for things that happened 2 years BEFORE HE TOOK OFFICE, troll!!!!
Posted by txgrouch2006 at 09:55 AM : Sep 23, 2008
MY,MY...You are in denial aren''t you? You bushites will never learn... just too dumb to get the real picture. - Reply to this comment
- Let the private sector fail. Sounds great to me. I''d like to see the CEOs of Goldman Sachs and JP Morgan scrounge for gas money to get to work.
- Reply to this comment
- You know fully well that the republicons fully controlled ALL BRANCHES OF OUR GOVERNMENT until 2 years ago
Posted by leftyintexas at 09:40 AM : Sep 23, 2008
That started in 2001. BILL CLINTON SIGNED THE 1999 BANKING DEREGULATION. He could have vetoed it, but he didn''t.
DON''T BLAME BUSH for things that happened 2 years BEFORE HE TOOK OFFICE, troll!!!! - Reply to this comment
- You can''''t blame one without the other.
Posted by txgrouch2006 at 09:25 AM : Sep 23, 2008
Wanta bet??? You know fully well that the republicons fully controlled ALL BRANCHES OF OUR GOVERNMENT until 2 years ago when the country FINALLY came to it''s senses and voted more Democrats into office. Now if the Democrats don''t start changing things drasticly when they gain FULL control, I''m all for having a three or four party political system to give us an alternative. - Reply to this comment
- you said you were voting for Obama. Now tell me, just how you can justify voting for him while blasting the Democrats AND DEFENDING THE REPUBLICONS? Hahahaha! You learned well from McCain...Flip-flop,flip-flop,flip-flop.
Posted by leftyintexas at 09:28 AM : Sep 23, 2008
So, do you think I should vote for McCain?????
YOU''RE the Texass guy everybody makes fun of. You make ALL OF US look bad. - Reply to this comment
- Because THE DEMOCRATS WILL PROFIT from these things if nobody stops them. AND YOU DON''''T WANT TO INTERFERE WITH YOUR RELIGIOUS INFATUATION WITH THE DEMOCRATS who are equally to blame for the downfall you complain about.
Posted by txgrouch2006 at 09:09 AM : Sep 23, 2008
Hahaha! I just read another of your comments in which you said you were voting for Obama. Now tell me, just how you can justify voting for him while blasting the Democrats AND DEFENDING THE REPUBLICONS? Hahahaha! You learned well from McCain...Flip-flop,flip-flop,flip-flop. - Reply to this comment
- You are sooo FULL OF IT.
Posted by leftyintexas at 09:15 AM : Sep 23, 2008
Once again, look who''s talking. Don''t try to lie your way out of THIS one.
BILL CLINTON signed the 1999 banking deregulation bill. He could have vetoed it. But he didn''t.
BUSH IS TO BLAME
CLINTON IS TO BLAME
BUSH IS TO BLAME
CLINTON IS TO BLAME
You can''t blame one without the other. - Reply to this comment
- Posted by txgrouch2006 at 09:09 AM : Sep 23, 2008
You are sooo FULL OF IT. You republicons are always in a state of denial...Always s-crewing things up and always looking for a scape goat. Get over it. You and YOU republicons alone are to blame for this disasterous eight years of DUMBYA and his gang of brown nosing goons. YOU have NO CREDIBILITY LEFT! - Reply to this comment
- Don''''t you brainless republicons just looove the way DUMBYA has dragged this country down
Posted by leftyintexas at 08:46 AM : Sep 23, 2008
Look who''s talking about "brainless."
Why aren''t you talking about the CONFLICT OF INTEREST that this bailout represents to the members of Congress who are personally invested in these subprime loans? They stand to get MILLIONS from this bailout.
Why aren''t you talking about WHO GETS THE INCOME that will result from these mortgages after the government buys them?
Because THE DEMOCRATS WILL PROFIT from these things if nobody stops them. AND YOU DON''T WANT TO INTERFERE WITH YOUR RELIGIOUS INFATUATION WITH THE DEMOCRATS who are equally to blame for the downfall you complain about. - Reply to this comment
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