Deal reached on $700B bailout, lawmakers say

by on September 25, 2008 · 4 comments

in Economy

UPDATE: Deal falls apart as GOP rank and file revolt against ‘socialism’ – go here.

Bailout said to provide some help for homeowners facing foreclosure, give the Treasury power to take stakes in financial firms, set up tougher oversight of the process and put limits on executive pay.

By Justin Hyde / Free Press Washington Staff / September 25, 2008

WASHINGTON – Congressional leaders from both political parties said today they had agreed to the outlines of a proposed $700 billion bailout of U.S. financial markets, with limits on executive pay and help for homeowners in distress.
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Pelosi also said the House would vote on a second economic stimulus plan, which would include an extension of unemployment benefits.The agreement came a few hours ahead of a meeting called by President George W. Bush with House and Senate leaders, along with presidential candidates John McCain and Barack Obama this afternoon.

Lawmakers said many of the final details were still being hammered out, and that the deal still needed input from the Bush administration, but that the map for the largest government move in the U.S. financial system since the Great Depression had been drawn.

“We are prepared to act expeditiously on a plan with our colleagues that will allow us to send a very strong message to the markets,” said Sen. Christopher Dodd, D-Conn.

The Dow Jones Industrial average was up about 240 points after the deal was announced.

Sen. Bob Bennett, R-Utah, said lawmakers had a deal “that will pass the House, pass the Senate, be signed by the Senate and bring a sense of certainty to the markets.”

The deal followed a speech by Bush where he delivered a dire message to the nation Wednesday night, saying without help the credit markets could trigger a “long and painful recession” with millions of job losses. He argued that only the U.S. government has the “patience and resources” to buy up mortgages and bonds based on them that have frozen the markets, and to hold them until their values recover.

Lawmakers said the deal would include four important changes from the proposal the Bush administration sent Congress last weekend. It will provide some help for homeowners facing foreclosure, give the Treasury power to take stakes in financial firms, set up tougher oversight of the process and put limits on executive pay.

House Speaker Nancy Pelosi, D-Calif., and Senate Majority Leader Harry Reid, D-Nev., said both houses were ready to act quickly once a final bill was crafted.

“I’m pleased with the progress that’s being made,” Pelosi told reporters today. “We want to pass this legislation responsibly and soon.”

Pelosi also said the House would vote on a second economic stimulus plan, which would include an extension of unemployment benefits. Democrats had been pitching a $50 billion proposal before the financial crisis; Pelosi said she hoped to get support from President Bush for the plan later today.

McCain, who said Wednesday he was suspending his campaign to focus on the financial crisis, did not arrive into Washington until midday. On Wednesday, the McCain and Obama campaigns released a joint statement addressing the crisis, but McCain rejected a call from Obama to support the principles that lawmakers agreed to today.

In a speech today, McCain agreed the plan should include oversight, some way for the government to recoup money and limits on executive pay.

“I am confident that before the markets open on Monday we can achieve consensus on legislation that will stabilize our financial markets, protect taxpayers and homeowners, and earn the confidence of the American people,” McCain said.

Democrats criticized McCain for parachuting into the debate, noting the Arizona senator has not cast a vote in the chamber since April. Reid said McCain had remained unclear about his stance, and that time was running short for him to back the plan.

“If John McCain is opposed to this, that’s too bad,” Reid said. “I think he’s standing in the way of completing this legislation.”

[Go here for the article.]

{ 4 comments… read them below or add one }

avatar dougbob September 25, 2008 at 3:02 pm

oh wait! there is no deal. the mcpalins can’t get the gop’s house rank & file to fall in line. stay turned.

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avatar AnonNClairemont September 26, 2008 at 10:49 am

There had better be something big in this deal for us common folk, or else! What to see an insurrection?

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avatar Monty Reed Kroopkin September 27, 2008 at 4:47 am

“If money isn’t loosened up, this sucker could go down,” ???

Which sucker is Bush talking about? Himself? The collective “sucker” of the world’s working class (which has allowed capitalism to survive so long) ?

And calling the “bailout” plan “socialism” ? Is that confusing state ownership of capital (by a clearly pro-capitalist state) with democratic social control of the economy by an organized working class majority (socialism). The bailout plan is really more akin to classical fascism than socialism, is it not?

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avatar OB Joe September 27, 2008 at 9:57 am

You da sucker Monty! NOT!

For the right-wing, of course, this bail out looks like ‘socialism’ – what da hell do they know, right?
Fascism would only be enhanced by the bailout if there was absolutely no ‘democratic’ control over the money and the companies bailed out. We still have the ‘semblance’ of a democracy – that is we still have ‘open’ elections (open to the major parties) and a semblance of a ‘free press’ – of course, we don’t really, but the semblance is there. (That’s why blogs like this are needed – thanks guys.)

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