Pelosi: Summary of Draft Proposal

[babylonsister]

http://calculatedrisk.blogspot.com/2008/09/pelosi-summary-of-draft-proposal.html

Pelosi: Summary of Draft Proposal

by CalculatedRisk

From Office of Speaker Nancy Pelosi -- Sept. 28, 2008

REINVEST, REIMBURSE, REFORM


IMPROVING THE FINANCIAL RESCUE LEGISLATION

Significant bipartisan work has built consensus around dramatic improvements to the original Bush-Paulson plan to stabilize American financial markets -- including cutting in half the Administration's initial request for $700 billion and requiring Congressional review for any future commitment of taxpayers' funds. If the government loses money, the financial industry will pay back the taxpayers.

3 Phases of a Financial Rescue with Strong Taxpayer Protections

# Reinvest in the troubled financial markets … to stabilize our economy and insulate Main Street from Wall Street

# Reimburse the taxpayer … through ownership of shares and appreciation in the value of purchased assets

# Reform business-as-usual on Wall Street … strong Congressional oversight and no golden parachutes

CRITICAL IMPROVEMENTS TO THE RESCUE PLAN

Democrats have insisted from day one on substantial changes to make the Bush-Paulson plan acceptable -- protecting American taxpayers and Main Street -- and these elements will be included in the legislation

Protection for taxpayers, ensuring THEY share IN ANY profits

# Cuts the payment of $700 billion in half and conditions future payments on Congressional review

# Gives taxpayers an ownership stake and profit-making opportunities with participating companies

# Puts taxpayers first in line to recover assets if participating company fails

# Guarantees taxpayers are repaid in full -- if other protections have not actually produced a profit

# Allows the government to purchase troubled assets from pension plans, local governments, and small banks that serve low- and middle-income families

Limits on excessive compensation for CEOs and executives

New restrictions on CEO and executive compensation for participating companies:

# No multi-million dollar golden parachutes

# Limits CEO compensation that encourages unnecessary risk-taking

# Recovers bonuses paid based on promised gains that later turn out to be false or inaccurate

Strong independent oversight and transparency

Four separate independent oversight entities or processes to protect the taxpayer

# A strong oversight board appointed by bipartisan leaders of Congress

# A GAO presence at Treasury to oversee the program and conduct audits to ensure strong internal controls, and to prevent waste, fraud, and abuse

# An independent Inspector General to monitor the Treasury Secretary's decisions
Transparency -- requiring posting of transactions online -- to help jumpstart private sector demand

# Meaningful judicial review of the Treasury Secretary's actions

Help to prevent home foreclosures crippling the American economy

# The government can use its power as the owner of mortgages and mortgage backed securities to facilitate loan modifications (such as, reduced principal or interest rate, lengthened time to pay back the mortgage) to help reduce the 2 million projected foreclosures in the next year

# Extends provision (passed earlier in this Congress) to stop tax liability on mortgage foreclosures

# Helps save small businesses that need credit by aiding small community banks hurt by the mortgage crisis—allowing these banks to deduct losses from investments in Fannie Mae and Freddie Mac stocks

[adamuu]

1. K&R n/t

[99th_Monkey]

2. This is really different from another "summary" of the new plan

This is a much more palletable version than another one I saw, where the "oversight board" consisted only
of SEC chair, Fed Chair, etc. all Bush-appointed Repuke cabinet members, no congressional oversight, no
GAO oversight.

I hope this one's the real deal.

[magellan]

3. How can they guarantee reimbursement

...with trillions in derivatives out there?

[BearSquirrel2]

4. Lets all cut the shit ...

Lets cut through all this shit. If this paper was worth something these companies wouldn't be asking for a bailout.

Both parties are in full bullshit mode right now. I'm REALLY pissed off at the Democrats at this point for being a bunch of spineless, kiss ass, bend over and take it weenies!!!

[NoUsername]

6. Exactly.

If the paper is worth so much, I am MORE than willing to sell mine to my Congresspeeps. And if the bailout is such a great deal, they should be thrilled that I am offering them the opportunity to buy me out. Just think of all the money they can make.

[BearSquirrel2]

5. I'd add one HUGE caveat ...

Id add one huge caveat that they did not ... get rid of Paulson. As the former CEO of a company they are bailing out and holding half a billion in stock, there is an undeniable conflict of interest.

No one can seriously suggest that Paulson is fit to oversee this. We all know how "judicial reviews" go in this administration. They'll argue jurisdiction until the clock runs out.

[NoUsername]

7. The actual bill was posted in the Economy forum.

Here's a link to the text of the bill:

http://money.cnn.com/2008/09/28/news/pdf/index.htm

Edited to correct link after a correction was made in the Economy forum.