Reply #1: Some of the substance... beyond the McCain stuff

[chill_wind]

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After the House Republican rebellion at the White House cast doubt on the agreement's fate, negotiators reconvened Thursday night, hoping once again to find common ground. But they were uncertain how to handle the Republican alternative, whose chief feature would permit the government to provide insurance to firms to buy troubled assets rather than spend taxpayer money on them.

"Rather than providing taxpayer funded purchases of frozen mortgage assets, we should adopt a mortgage insurance approach to solve the problem," a GOP fact sheet said.

Under the plan, firms would pay insurance premiums to the government in return for coverage.

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Among the main points reached in the bipartisan agreement in principle:

Earlier, negotiators had produced a one-page "agreement on principles" that includes:

* Funding. Treasury would be authorized to spend $700 billion, but would get only $250 billion immediately, with another $100 billion to be released once the Treasury secretary certifies the money is needed. The other $350 billion could be canceled if Congress passed a joint resolution of disapproval.

* Executive pay. The Treasury Department would "set standards to prevent excessive or inappropriate executive compensation for participating companies."

* Taxpayer equity. Taxpayers could share in the profits of firms that benefit from the bailout as they return to financial health.

* Oversight. The legislation would establish a "strong oversight board with cease and desist authority," as well as an independent inspector general who would monitor "the use of the Treasury Secretary's authority." The Government Accountability Office, Congress' investigative arm, also would audit the use of bailout funds. Regular detailed reports to Congress on the program would be required.

* Homeowners. The agreement mandates maximum coordinated efforts to modify mortgages for homeowners at risk of foreclosure; requires loan modifications for mortgages owned by the federal government; and directs that a percentage of future profits go to federal housing funds.

* Judicial review. The government would be barred from "acting in an arbitrary or capricious manner or in any way that is inconsistent with existing law," which ensures the possibility of legal challenges in court. The original administration plan would have prohibited judicial review.

To help push the package, lawmakers from both parties, including Sens. John McCain and Barack Obama, the Republican and Democratic presidential candidates, respectively, were meeting with President Bush at the White House later Thursday afternoon. McCain and Obama were not present in the congressional negotiations that produced the agreement in principle.

More at link: http://www.mcclatchydc.com/227/story/53085.html