Congress, Bush team agree on bailout terms

[dweller]

Monday September 22, 3:32 pm ET
By Julie Hirschfeld Davis
Administration accepts lawmakers' demands for mortgage aid, oversight in $700 billion bailout

WASHINGTON (AP) -- A key Democrat negotiating a $700 billion financial bailout says the Bush administration has agreed to include mortgage aid and strong congressional oversight in the plan.

Rep. Barney Frank, the Financial Services Committee chairman, says a great deal of progress has been made in talks between lawmakers and President Bush's team on the rescue.

A government official with knowledge of the talks also said the administration has agreed to create a plan to help prevent foreclosures on mortgages it acquires as part of the bailout.

http://biz.yahoo.com/ap/080922/financial_meltdown.html

dp

[central scrutinizer]

1. what about the oversight and review??

That has to be part of this - no blanket unchecked powers for these criminals.

[DrDan]

2. the congressional oversight was added as a smokescreen

junior and team act as if that is a concession - but CEO pay will not be touched. Amd that was the key issue - not the oversight.

All choreographed.

[gateley]

3. Well I feel better that Barney Frank is in the mix, but what about

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=132x7144436

[Swamp Rat]

4. Never make deals with fascists.

[Blue_In_AK]

Swampie,

it's GREAT to see you back here. :hug:

[dweller]

5. nice one Swampie !

:rofl:

dp

[dweller]

6. more on updated news release

Under other additions the Democrats are asking to the administration package, according to a draft of the plan obtained by The Associated Press:

-- Judges could rewrite mortgages to lower bankrupt homeowners' monthly payments.

-- Companies that unloaded their bad assets on the government in the massive rescue would have to limit their executives' pay packages and agree to revoke any bonuses awarded based on bogus claims.

The proposal by Sen. Chris Dodd, D-Conn., the Banking Committee chairman, would give the government broad power to buy up virtually any kind of bad asset -- including credit card debt or car loans -- from any financial institution in the U.S. or abroad in order to stabilize markets.

But it would end the program at the end of next year, instead of creating the two-year initiative that the Bush administration has sought. And it would add layers of oversight, including an emergency board to keep an eye on the program with two congressional appointees, and a special inspector general appointed by the president.

The plan also would require that the government get shares in the troubled companies helped by the rescue.

Wall Street didn't seem comforted. The Dow Jones industrials were down nearly 400 points near the end of the trading day.

Investors were uncertain just how successful the administration's plan will be in unfreezing credit markets, which many businesses depend on to fund day-to-day operations, and for propping up the still-weak housing market.

Congressional aides said the House could act on a bailout bill as early as Wednesday.

Bush said, "Obviously, there will be differences over some details, and we will have to work through them. That is an understandable part of the policy making process." But he also said, "It would not be understandable if members of Congress sought to use this emergency legislation to pass unrelated provisions, or to insist on provisions that would undermine the effectiveness of the plan."

The proposal that Dodd sent to Treasury Secretary Henry Paulson would let judges modify the mortgages of homeowners in bankruptcy to allow them to keep their homes.

It also would require that the government come up with "a systematic approach for preventing foreclosure" on the mortgages it acquires as part of the bailout. That would include the home loans held by Fannie Mae and Freddie Mac, the troubled mortgage giants now under the control of a government regulator.

Treasury spokeswoman Brookly McLaughlin said, "We are confident that we can get a bill done this week."

The fast-moving negotiations between the administration and Congress unfolded a day after the government approved a request by investment houses Goldman Sachs and Morgan Stanley to change their status to bank holding companies.

That change will allow the two venerable institutions to set up commercial banks that will be able to take deposits, significantly bolstering the resources of both institutions. It will also grant them permanent access to emergency loans supplied by the Fed rather than the temporary loan status they have had since last March when the Fed moved to prop up investment banks following the forced sale of Bear Stearns.

Frank said that lawmakers "are building strong oversight" into the new bailout measure.

"The private sector got us into this mess," he said, "The government has to get us out of it. We do want to do it carefully."

dp