Dodd Proposes Alternative Bailout Bill (Update - WH Agrees Some Terms)

By Cernig

Here's the full text of Chris Dodd's alternative bailout bill. This is far more like it:

Banking Committee Chairman Christopher Dodd is taking much more aggressive approach to the Treasury bailout plan, demanding foreclosure assistance, limits on executive compensation and profit sharing for taxpayers if the Treasury begins to make money back on the bad debt it plans to purchase.

[snip]

Among the major provisions Dodd is adding:

* Authority for bankruptcy judges to restructure mortgages for homeowners facing foreclosure. This was considered a poison pill in a housing bill that passed Congress earlier this summer, but it has gained much more currency now that Washington wants to bail out Wall Street.

* A provision that would require the Treasury to take a 65 percent portion of 20 percent any profits it makes from the newly purchased assets and put it into the federal government's HOPE program, an affordable housing program.

* An oversight board that not only includes the chairman of the Federal Reserve and the SEC, but congressionally appointed, non-governmental officials.

* Limits on executive compensation. This is a major stumbling point for Paulson in his negotiations with Congress, but cracking down on Wall Street executive salaries will be a major selling point for lawmakers. Dodd and Frank have put in place what's known as a "claw back" provision aimed at revoking compensation that executives received based on fraudulent claims.

* An independent inspector general to investigate the Treasury asset program, appointed by the president.

Krugman says it "sounds like a big step in the right direction" and "Treasury should now be required to explain why this isn’t a much, much better way to do this rescue". Hopefully Democrats will get behind Dodd rather than folding to the administration's pressure to quickly accept the biggest corporate giveaway in history as well as Section Eight - which should be called The "God calls me God" Clause.

Dodd talked to CBS today:

Update: From the AP. It looks like the Bush administration is folding on Paulson's insistence that everything be done his way.

Scrambling for a quick accord on the $700 billion bailout, the Bush administration and leading lawmakers have agreed to include mortgage aid and strong congressional oversight along with unprecedented help for failing financial institutions, a key lawmaker said Monday.

... Rep. Barney Frank, D-Mass., chairman of the House Financial Services Committee, said "a great deal of progress has already been made." And a government official with knowledge of the talks said the administration had agreed to create a plan to help prevent foreclosures on mortgages it acquires as part of the bailout — a key demand of Democratic lawmakers.

... 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."

Good.

Meanwhile John McCain says "We are in the most serious crisis since World War II." Probably true, this time, but a few weeks ago he was saying that Georgia was the most serious crisis since "the end of the Cold War". I suppose if he says "this [insert new crisis here] is the most serious crisis since The Flood" enough times, he'll turn out to be right eventually too.

Comments

[xenophon]

I'm happy to see, at long last, some resistance in Congress to being pressured into passing anything just because the Bush White House says it is an emergency.

The Democrats are displaying some spine only because there is blood in the water, and they know it is safe. Oh well, at least it is something...five years too late...but at least it is something.

I've been thinking about this whole pathetic spectacle and trying to come up with a single statement that will describe it.

This is what I've come up with so far: this whole bail out thing, this whole "privatize profits, socialize losses" thing is the ultimate expression of Ivy League/MBA/rich frat boy class solidarity in the history of the universe.

For eight years our country has had the whole unmitigated, undiluted right wing, neo-con, free market Republican program, and where has it landed us? Socialism! Yeah! George Bush has nationalized all of the major engines of the American economy, and it ain't over yet!

As for me, I'm digging out, and dusting off my copy of "Quotations of Chairman Mao" it might just come in handy in the not too distant future.

Twelve months from now the New York Stock Exchange will be called the Long March People's Democratic Stock Exchange Collective of Shanghai, Chairman Mao Branch.

[pwapvt]

two words: Signing statement.