Democratic Bailout Draft Circulating

Democrats are circulating a 42-page discussion draft of a House bill being called the Troubled Assets Relief Act of 2008 that outlines a counter proposal to the administration bailout plan. The White House bill clocked in at 40 fewer pages.

The House bill would give Treasury Secretary Henry Paulson the $700,000,000,000 that he's asked for but would increase oversight of the bailout and would put strict limits on executive compensation. It would prevent banks from giving golden parachutes to senior executives who sell equities or junk assets to the federal treasury.

The draft also includes detailed foreclosure mitigation efforts, including provisions that would allow struggling homeowners to refinance mortgages by extending the time horizon and lowering monthly payments.

The U.S. comptroller general would establish an office with Paulson's building and would have broad authority to investigate the program, which the bill calls the Troubled Assets Relief Program. 

A seven-member Congressional Oversight Panel would also be established by the bill.

The Crypt is unclear so far who authored this draft, but will update as soon as we know.

UPDATE: An administration source says the bill is the work of Rep. Barney Frank (D-Mass.), chairman of the Financial Services Committee, who is taking the lead in the House. This post has been updated to include more information from the bill.

John Bresnahan contributed to this post.