Democrats have begun to push back on the bailout plan offered by the Bush Administration!

[BigBearJohn]

***UPDATE*** 11:11PM Democrats have begun to push back on the bailout plan offered by the Bush Administration, specifically with legislation that would cut the salaries of the CEO's whose firms participate in the bailout and by adding more oversight provisions. The Washington Post reports:

Congressional Democrats considering the Bush administration's emergency plan to shore up the U.S. financial system yesterday countered with their own demands, presenting draft legislation giving the government power to cut salaries of chief executives at firms that participate in the bailout and slash severance packages for their top management...

...Democrats sought to add oversight provisions and taxpayer protections to the proposal, which amounts to the largest government intervention in the private markets since the Great Depression. "We will not simply hand over a $700 billion blank check to Wall Street," House Speaker Nancy Pelosi (D-Calif.) said in a statement.

Under the proposal drafted by House Democrats, the Treasury would be required to force faltering firms that want to sell their troubled assets to the government to "meet appropriate standards for executive compensation." Those standards would include a ban on incentives that encourage chief executives to take "inappropriate or excessive" risks, a mechanism to rescind bonuses paid for earnings that never materialize and limits on severance pay.

READ MORE: http://www.huffingtonpost.com/2008/09/21/paulson-resisting-democra_n_128035.html

[Gore1FL]

1. Other things I'd like to see enacted with this

1> Raise minimum wage
2> A two-year foreclosure moratorium
3> A tax on ALL profitable companies that cut jobs or ship them overseas, such that the company must pay employment and payroll taxes for those jobs for 5 years at the rate employee was making when the job was los

to name a few...

[DJ13]

2. 4> A return to usury laws to limit interest rates

[Gore1FL]

6. Good One!!

lets limit it based on the prime + X% as well. (assuming X = 5-7%) That would seem more than fair.

[ProgressiveEconomist]

3. My list of conditions would force participating companies to stop doing what got them

into trouble, and keep them from simply taking the money and wasting it rather than loaning it out.

IMO, we do have a real crisis, and the Fed well may lose substantial control over interest rates for a period of time. But I think there are much less costly strong steps that could be taken instead of the two-year blank check for $700B the WH insists be offered to financial institutions, healthy and unhealthy alike.

My alternative interim proposal would be (1) to follow Obama's principles and (2) put so many restrictions on companies that would sell illiquid assets to the Treasury that only the sickest of institutions would step up to sell. These restrictions would include

(a) a strict cap on leverage,
(b) COMPLETE weekly transparency on their operations for the next five years and last five yars,
(c) a five-year ban on stock buybacks,
(d) limits on executive compensation, and
(e) ten-year warrants for the Treasury that would give taxpayers a chance for payback from future stock-price increases as well as from the illiquid securities Treasury would receive now.

IMO, what government MUST worry about is possible spread of financial crisis from failing institutions to healthy insititutions holding similar assets. This is what happened during the Great Depression. "Margin calls" gave failing institutions just hours in which to dump huge quantities of assets. When failing institutions dump illiquid assets all of a sudden, the value of holdings of healthy institutions can plummet. But if sales of assets are spread out in time so markets can digest them, downward price spirals can be avoided. Slowing down the liquidation of illiquid assets of failing financial institutions over the next 3-6 months is something the Feds can accomplish for much less than a trillion, and with the expectation of eventual profit for taxpayers.

IMO, if Congressional Democrats can resist financial lobbyists' pleas for a two-year universal bailout, and instead strive to slow down liquidation of illiquid assets for 3-6 months, we can gain time for a thorough debate of longer-term measures, and save hundreds of billions of dollars to give President Obama flexibility.

[SDJay]

4. Not sure the CEO pay clause is unreasonable...

If the gov't owns an interest in these companies, they should be able to dictate certain things. I mean, since this is Republican Socialism and all. Seriously, though, as a small business owner, I'm fully aware of the reality that most of the time, the CEO is paid basically on the profit of the company, at least in terms of any bonuses. The fact that these crooks got these parachutes is wrong, so tie their pay to their productivity and profit. Same with other officers.

[screembloodymurder]

5. Do not negotiate with terrorists.

Haven't you people learned anything from eight years of broken promises? WTF is this, the battered party syndrome? The Dems just keep going back.

[Top Cat]

7. No bailout without help for homeowners

[mrih]

8. Refinancing options not just for bad mortages, but...

Current home owners. Refinance those who faced foreclosure at todays current rate, and offer to refinance those who didn't fall into the scheme an EVEN WAY WAY LOWER interest rate.

Here's why I say this... it pumps more money back into our economy and isn't giving home owners a free pass just because they foreclosed, it also isn't taxing them to recover funds for the rich, Allowing everyone else to refinance their current homes (not new or secondary homes mind you) will help these Americans to spend more each month themselves. Like Obama says, it is TRICKLE UP not DOWN.

I mean otherwise, what does that do to the value of your home .vs someone else's home who got a bail out?

I say these companies should take the hit by having to get LESS money from us all in interests and what have you.

Say $700 Billion LESS from us all??

[curious one]

9. All are good ideas but they will not listen to us.