Dodd's legislation, obtained this morning by Politico, has just started to circulate among Senate legislative directors. His plan addresses many of the concerns raised by Democrats and Republicans who are concerned about handing over $700 billion blank check to Treasury Secretary Henry Paulson.
While the Treasury would receive much of the authority that it wants to buy up distressed assets, Dodd's add-ons have many of the populist ideas that will appeal to skeptical Democrats. His plan is also broader than the one unveiled by House Financial Services Chairman Barney Frank (D-Mass.), so there will be significant negotiations in the days ahead between the House and Senate if Congress is to pass a bill by the end of the week.
Among the major provisions Dodd is adding:
* Authority for bankruptcy judges to restructure mortgages for homeowners facing foreclosure. This was considered a poison pill in a housing bill that passed Congress earlier this summer, but it has gained much more currency now that Washington wants to bail out Wall Street.
* A provision that would require the Treasury to take 65 percent of any profits it makes from the newly purchased assets and put it into the federal government's HOPE program, an affordable housing program.
* An oversight board that not only includes the chairman of the Federal Reserve and the SEC, but congressionally appointed, non-governmental officials.
* Limits on executive compensation. This is a major stumbling point for Paulson in his negotiations with Congress, but cracking down on Wall Street executive salaries will be a major selling point for lawmakers. Dodd and Frank have put in place what's known as a "claw back" provision aimed at revoking compensation that executives received based on fraudulent claims.
* An independent inspector general to investigate the Treasury asset program, appointed by the president.