Given that we have seen the announced deals blow up already, I am rather skeptical of this one. For all I know they are attempting to stop the flood of emails and faxes. Anyway, here is the announcement: Congress, White House reach financial bailout deal.
Congressional leaders and the Bush administration reached a tentative deal early Sunday on a landmark bailout of imperiled financial markets whose collapse could plunge the nation into a deep recession.
House Speaker Nancy Pelosi announced the $700 billion accord just after midnight but said it still has to be put on paper.
“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.
The plan calls for the Treasury Department to buy deeply distressed mortgage-backed securities and other bad debts held by banks and other investors. The money should help troubled lenders make new loans and keep credit lines open. The government would later try to sell the discounted loan packages at the best possible price.
At the insistence of House Republicans, some money would be devoted to a program that would encourage holders of distressed mortgage-backed securities to keep them and buy government insurance to cover defaults.
The legislation would place “reasonable” limits on severance packages for executives of companies that benefit from the rescue plan, said a senior administration official who was authorized to speak only on background. It would affect fired executives of financial firms, and executives of firms that go bankrupt. Some of the provisions would be retroactive and some prospective, the official said.
Also, 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 would require the government to try renegotiating the bad mortgages it acquires with the aim of lowering borrowers’ monthly payments so they can keep their homes.
At the insistence of House Republicans, who threatened to sidetrack negotiations at midweek, the insurance provision was added as an alternative to having the government buy distressed securities. House Republicans say it will require less taxpayer spending for the bailout.
But the Treasury Department has said the insurance provision would not pump enough money into the financial sector to make credit sufficiently available. The department would decide how to structure the insurance provisions, said Sen. Kent Conrad, D-N.D., one of the negotiators.
Money for the rescue plan would be phased in, he said. The first $350 billion would be available as soon as the president requested it. Congress could try to block later amounts if it believed the program was not working. The president could veto such a move, however, requiring extra large margins in the House and Senate to override.
It was not immediately clear how many House Republicans might vote for the measure. With the election five weeks away, Democrats have said they would not push a plan that appeared sharply partisan in nature.
The real deal?
I am not sure if this is the real deal or not. The amount is $350 billion so that is a partial victory, but this super-majority stuff is nonsense. Congress should not give up power to the president in any bill!
I must remind everyone this has not passed the House yet, (it is just a leadership vote), and it certainly has not passed the Senate.
For the benefit of taxpayers, I want every ounce of flesh I can get. Please press on!
Stay focused on the mission, and that mission is to kill it and if that fails to get it watered down as best we can.
The House may not pass this monstrosity and it still has to get through the Senate. Press on.
Target all your congressional representatives. Let them know that $350 billion is too much, limits on salaries are far too weak, the plan is not the correct one in the first place and it is simply better to start all over.
Also stress the public and top economists must see this bill and be allowed to comment on it before it is voted on.
Please do two separate phones and faxes.
Rather than drafting a new fax, I will let people come up with their own. I want everyone to make double faxes to everyone. The first is along the lines of what was suggested in Senator Dianne Feinstein Responds To Constituents about pay scales, stock options, and executive parachutes.
Please do a second set of phone calls and faxes on the alleged agreement above and how and why it is wrong.
“Dear [congressional rep]. I have read the latest proposal and I have come to the same conclusion. No Deal.
Where are the salary caps and limits on stock options?
Salary caps and elimination of all stock options MUST be included in any proposal, not just for executives, but for every employee in the company.
Also $700 billion is way too high, piecemeal or not. And the plan is still fatally flawed. The overall approach is simply the wrong one. 190+ economists think the plan will not work, so does former Treasury Secretary O’Neil, and so do CEOs of well run banks.
New Proposal Cedes Congressional Authority To The Administration
The limit on any bailout should be no more than $250 billion flat out with no automatic escalations. If Congress thinks more money is needed it can vote to provide more money later. Ceding blank check power to the president and requiring super majorities to override would set a dangerous precedent. I am appalled that the administration would ask for such power and I am even more appalled that Congress would be willing to structure a bill this way.
Ceding power to the treasury on how to best implement the insurance provision is also a terrible idea. Congress, not the Treasury should stipulate how insurance should work. Leaving insurance to the discretion of the Treasury is tantamount to agreeing there should not be insurance.
Reason For The Mad Rush To Act Quickly
The reason for a “mad rush” to do something is that the administration does not want Congress to think about what is happening. And what is happening is this revised bill transfers congressional authority to the administration. Just Say No!
I will vote out of office anyone who votes for this revised plan, and I will encourage all my friends to do the same.
If you do not have internet faxing get it.
I went with MetroFax. 1000 pages at a very cheap price.
If you are reading this most likely you can afford $12.
Sign up today and fax to your heart’s content.
Contact The House
Please fax AND phone your congressional representative and Nancy Pelosi, Barney Frank, and Senator Dianne Feinstein.
Rep. Nancy Pelosi (D)(202) 225-4965
Rep. Barney Frank (D)(202) 225-5931
Sen. Dianne Feinstein (D) (202) 224-3841
Sen. Richard Shelby (R) (202) 224-5744
Sen. Harry Reid (D) 202-224-3542
Sen. Jim DeMint (R) 202-224-6121
Sen. John Ensign (R) (202) 224-6244
Sen. Jim Bunning (R) 202.224.4343
Sen. Chuck Grassley (R) (202) 224-3744
Sen. John McCain (R) 202-224-2235
Sen. Barack Obama (D) (202) 224-2854
Call them with this simple message “I have seen the revised bill, you will lose my vote if it passes“.
Congressional Phone And Fax Numbers
Click Here For Congresional Phone And Fax Numbers
Senate Fax List
Please fax everyone on this list.
Sen. Richard Shelby (R) 202-224-3416 or 202-224-5137 (try both not sure which is correct)
Sen. Harry Reid (D) 202-224-7327
Sen. Jim DeMint (R) 202-228-5143
Sen. John Ensign (R) 202-228-2193
Sen. Jim Bunning (R) 202-228-1373
Sen. Chuck Grassley (R) 202-224-6020
Sen John McCain (R) 202-228-2862
Sen. Barack Obama 202-228-4260
Sen. John D. Rockefeller 202-224-7665
Sen. Dianne Feinstein 202-228-3954
Sen. Ron Wyden 202-228-2717
Sen. Evan Bayh 202-228-1377
Sen. Barbara Mikulski 202-224-8858
Sen. Bill Nelson 202-228-2183
Sen. John Kerry 202-224-8525
Sen. Daniel Inouye 202-224-6747
Sen. Hillary Clinton 202-228-0282
Rep. Barney Frank 202-225-0182
Rep. Nancy Pelosi 202-225-4188
Please Fax own senators and representative as well.
Please send this email to 10 others and have them do the same.
We can STILL make a difference.
Mike “Mish” Shedlock
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