WASHINGTON, Sept. 28, 2008
Final Legislation On Bailout Revealed
House Will Vote Monday, Senate To Follow; $700B Package Would Be Largest Intervention In Markets Since Great Depression
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A key Republican negitator doubted that American taxpayers would lose money in the long run through the $700 billion bailout. (AP)
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Secretary of the Treasury Henry Paulson sits in the office of House Republican Leader John Boehner during ongoing negotiations on Capitol Hill regarding legislation on the financial crisis Saturday, Sept. 27, 2008 in Washington. (AP Photo/Lauren Victoria Burke)
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House Financial Services Chairman Barney Frank, D-Mass., center, and House Speaker Nancy Pelosi, D-Calif., left, and Secretary of the Treasury Henry Paulson, right, announce a tentative deal regarding on the financial crisis on Sunday, Sept. 28, 2008 on Capitol Hill in Washington. (AP Photo/Lauren Victoria Burke)
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Secretary of the Treasury Henry Paulson walks through the Capitol on his way to the office of House Republican Leader John Boehner, R-Ohio, regarding legislation on the financial crisis Sept. 27, 2008 on Capitol Hill in Washington. (AP Photo/Lauren Victoria Burke)
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House Republican Whip, Rep. Roy Blunt, R-Mo., right, and House Republican Leader, Rep. John Boehner, R-Ohio, speak to reporters regarding the status of legislation on the financial crisis Sept. 27, 2008 on Capitol Hill in Washington. (AP Photo/Lauren Victoria Burke)
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Play CBS Video Video Emergency High Stakes Bail Out Congress has held an emergency session in order to address the potentially catastrophic financial disaster currently facing the nation. But, as Thalia Assuras reports, there may some sticking points.
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Video GOP, Dems Face Off On Economy Katie Couric speaks with House Minority Leader Rep. John Boehner (R-Ohio) and Banking Committee Chairman Sen. Chris Dodd (D-Conn.) about the latest negotiations to reach a financial bailout deal.
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Video Politics Hamper Bailout Deal Talks over the $700 billion bailout have stalled. Congressional leaders are back at the table after conservative Republican leaders released their own version of the plan, Kathryn Brown reports.
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Interactive Eye On The Economy In-depth features on U.S. markets, taxes, employment and the Federal Reserve.
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Timeline Credit Crunch Feeling the squeeze? Here's a look at actions and statements from key players in Washington.
The House plans a vote on the rescue bill Monday. The Senate is expected to follow later this week.
The rescue is the largest government intervention in financial markets since the Great Depression. It would let the government take over huge amounts of devalued assets from beleaguered financial companies in hopes of unlocking frozen credit.
Democratic leaders in Congress are praising the rescue package for the financial industry as a vital move to shore up the sagging economy.
House Speaker Nancy Pelosi says the proposal is not a Wall Street bailout. Instead she calls it a buy-in to help the economy get turned around.
Pelosi spoke to reporters at the Capitol just after the final legislation was released Sunday and as House Republicans and Democrats met privately to review details and gauge support.
Senate Democratic leader Harry Reid says Congress won important concessions from the Bush administration in negotiating the bill. He says the White House wanted a blank check and lawmakers would not agree to that.
Flexing its political muscle, Congress insisted on a package that gives lawmakers a stronger hand in controlling the money than the Bush administration had wanted. The rescue plan casts Washington's long shadow over Wall Street with the federal government taking over huge amounts of devalued assets from beleaguered financial firms in exchange for more oversight.
The proposal, which would be phased so Congress can control the spending spigot, is designed to end a vicious downward spiral that has battered all levels of the economy, in which hundreds of billions of dollars in investments based on mortgages gone bad have 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 on Sunday. "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 - designed to limit the amount of federal money used in the rescue.
Another important bargain, vital to attracting support from centrist Democrats and Republicans who are fiscal hawks, would require that the government, after five years, submit a plan to Congress on how to recoup any losses.
Lawmakers could 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.
The presidential nominees came behind the outlines of the bailout.
"This is something that all of us will swallow hard and go forward with," said Republican Sen. John McCain of Arizona. "The option of doing nothing is simply not an acceptable option."
His Democratic rival, Illinois Sen. 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.
House Republicans said they're still reviewing the plan.
"We are not ready to say that a deal is done," Rep. Eric Cantor, R-Va.
Congressional leaders announced a tentative deal in the early hours of Sunday morning after marathon negotiations at the Capitol.
"We've still got more to do to finalize it, but I think we're there," said Treasury Secretary Henry Paulson, who also participated in the negotiations in the Capitol.
Executives whose companies benefit from the rescue could not get "golden parachutes" and would see their pay packages limited.
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 requires the government to try renegotiating the bad mortgages it acquires with the aim of lowering borrowers' monthly payments so they can keep their homes.
"Nobody got everything they wanted," said Democratic Rep. Barney Frank of Massachusetts, chairman of the House Financial Services Committee. He predicted it would pass, though not by a large majority.
Gregg, R-N.H., said he thinks taxpayers will come out as financial winners. "I don't think we're going to lose money, myself. We may, it's possible, but I doubt it in the long run," he said.
Frank appeared on C-SPAN, Obama was on CBS' Face the Nation, McCain spoke on "This Week" on ABC and Cantor was on "Late Edition" on CNN.
© MMVIII The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.
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- This is in reference to the bill that the politicians are working on.
Barney Franks who is one of the major leader in negotiating the bailout bill has also profited from Fanny May /Freddy Mack. Isn%u2019t it a conflict of interest for him to be involved in that negotiation? Why isn%u2019t anyone talking about this, is this a forbidden topic?
Will he and other politicians like him that took advantage of people, return that money that they took?
Will all of the executives in those banks and Wall Street give us back the money that they took (I am sure illegally)?
Will all those executives be replaced, since they mismanaged the business? They should be fired and investigated.
EmiliaMis - Reply to this comment
- The basics of making any deal are very simple, money in money out and what is left. If you are buying bad assets how could you possibly believe that eventually there will be a profit. The proper way to handle this is to charge the people responsible for this and arrest them, force the companies that created this mess to correct it without using tax dollars. I don''t know anyone that owns a business that would take this kind of risk with their money, why should we allow congress to do it for us. We all know that very few if any of the people trying to resolve this problem have any financial experience, again when I need financial advice I go to someone who actually knows what they are talking about.Considering that congress sat on their backsides and whatched this happen it would appear that they are the least qualified.The American public does not want to see our economy fail so let them participate in the solution, they have banded together over wars and other financial disasters what makes the government think they will not do it again.
- Reply to this comment
- Can there be yet more disasters and disgraces that the Bush cabal can give us?
Well, yes, things could continue to be bad. One way would be to vote for McCain/Palin and guarantee four more years of the same.
What a mess that the Democrats are going to inherit.
Was it planned?
Almost makes one forget about the messes in Iraq, Afghanistan, Iran, and Pakistant doesn''t it?
Almost. - Reply to this comment
- A bailout by any other name is still a bailout.
I oppose the bailout in any form.
Let the chips fall where they may.
A recession or depression will allow the country to regain its position with time and in better shape.
Allow nominal mortgage payments until it gets sorted out.
Many Wall Street and mortgage companies made hundreds of millions of dollars in their usurious positions and took obscene salaries and bonuses, some in the hundreds of millions of dollars.
I do want to see them rewarded for their avarice and mismanagement or Congress for their incompetence.
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Let''s keep in mind that had the lawmakers, i.e., Congress, been doing their job this bailout would never have happened.
Now, they want to be heralded as our saviors, B-lls-it.
Vote for term limits and vote the old guys, over two terms, out of office.
Incidentally, I am 72. - Reply to this comment
- TERM LIMITS FOR ALL MEMBERS OF CONGRESS
- Reply to this comment
- ...Do you trust them to provide the solution
I do not
Posted by amer1st
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Not an unfair assertion, I suppose.
Incidentally, for whom do you put your trust? - Reply to this comment
- Having Nancy Pelosi involved in this, after her part in leading Congress to its lowest rating ever, doesn''t thrill me!
Posted by StLouisMan3 at 06:29 PM : Sep 28, 2008
You are not that Stupid and Dumb from what I read here. However, you are an Idiot for continuing to support a Failed Ideology that is impacting you and your family beside our nation too big time. Where is your love, commitment, patriotism and loyalty to your nation and not your party? - Reply to this comment
- Having Nancy Pelosi involved in this, after her part in leading Congress to its lowest rating ever, doesn''''''''''''''''t thrill me!
Posted by StLouisMan3 at 06:29 PM : Sep 28, 2008
You are not that Stupid and Dumb from what I read here. However, you are an Idiot for continuing to support an Ideology that is impacting you too big time. - Reply to this comment
- Socialism always Salvage Capitalism in each of the previous 3 Great Depressions and 26 Recessions.
Viva La Socialismo! - Reply to this comment
- Having Nancy Pelosi involved in this, after her part in leading Congress to its lowest rating ever, doesn''''''''t thrill me!
Posted by StLouisMan3 at 06:29 PM : Sep 28, 2008
Please read the U.S. Constitution about the Filibuster and Veto Powers so you do not sound like a fool. - Reply to this comment
- Having Nancy Pelosi involved in this, after her part in leading Congress to its lowest rating ever, doesn''''t thrill me!
Posted by StLouisMan3 at 06:29 PM : Sep 28, 2008
Having a Republican have a say in it after their deregulation frenzy is crazy... - Reply to this comment
- Glad Capitol Hill finally asked W. Buffett for his opinion. As passionate as all of us bloggers are, Buffett has lived a simply lifestyle and made a great deal of money for his investors. I would trust his opinion no matter what my personal feelings about a bailout are, because feelings are not necessarily a test of reality. Certainly, all those machos on Wall Street were "feeling" powerful. All the while they were headed for a crash and disgrace. However,I can''t necessarily solely blame them. The companies'' Boards and shareholders certainly had a say in who was hired as CEO and the salaries and bailouts they received.
- Reply to this comment
- Exec''s should be fired with no compensation. They are responsible for the collapse of our economy. This is a bailout no matter how they want to sugar-coat it. We have been used by the rich and powerful and if the repub''s have thier way, we will be s****** with again.
- Reply to this comment
- The problem is also that Bill Clinton SIGNED Gramm''s evil bills which did NOT have a veto-proof majority.
McCain-Gramm-Clinton = WRONG FOR AMERICA!
We have no political leaders who are RIGHT for America. That''s why this nation is rapidly turning into a well-armed Banana Republic. - Reply to this comment
- It looks like it doesn''t matter who''s fault this is, but we think it is in part due to deregulation, greed on Wall Street, and on dreamy homebuyers who wanted to believe home "values" would keep going up.
It does not matter. Let''s get a genuine confidence-building program on the books, give a safety net for the banks we have supported for decades, give companies the credit they need to pay their salaries, for their supplies and shipping.
Why waste time in finger pointing now, and especially, why waste the nation''s time on grand-standing now. We know we need to swallow this one for now, so let''s get on with it. - Reply to this comment
- Posted by PAINBSLAP at 05:15 PM : Sep 28, 2008
Computer running slow? - Reply to this comment
