Senate Bailout Bill Up for Vote; Citizens Protest, World Leaders Watch and Wait
Mark to Market Provisions
Section 132 of the bailout bill authorizing the Security and Exchange Commission (SEC) to suspend mark to market accounting when it is determined to be in the public interest remains unchanged from the House version. Also unchanged is Section 133 requiring an SEC report within 90 days of the bailout bill's enactment on the feasibility and desirability of modifying mark to market.
Mark to market has been the subject of intense media coverage since the House bailout bill failed, with former House Speaker Newt Gingrich, writing in Forbes, quoting a Chicago economist as blaming mark to market for 70% of the market crisis. The Center for Audit Quality (CAQ) opposes changing mark to market, deeming the rule essential to transparency and informed market decision making. The CAQ credits the mark to market rule with revealing the severity of the nation's credit crisis and states that the rule did not create the crisis.
FDIC Limits
Federal Deposit Insurance which insures bank accounts up to $100,000 would be temporarily increased to $250,000 through December 31, 2009 under Section 136 of the Senate bailout bill. This provision is veritable window dressing since most bank depositors concerned about inadequate insurance coverage can establish multiple qualifying accounts under the $100,000 limit and receive full insurance coverage on each. The provision is aimed at preventing bank runs by large depositors.
Executive Compensation
The Senate bailout bill leaves the House provisions- a minimalist golden parachute provision laden with undercutting exceptions and no overall executive compensation caps- unchanged. Executive compensation was one area that inflamed many bailout bill protesters who decry having to bail out corporations whose executives pocketed tens of millions in annual compensation while their institutions failed and may continue to do so once the U.S. Treasury assumes responsibility for their troubled assets.
Tax Extenders and Alternative Minimum Tax Relief
The Senate bailout bill contains 25 provisions relating to business tax law extensions and 8 relating to individual tax law extensions
Add On Provisions
The Senate added hundreds of pages of legislation to the rejected House bailout bill, most of it unrelated to the bailout. This mammoth conglomeration of legislation now includes provisions addressing subjects as diverse as mental health parity, uncover operations and terrorist activities disclosure and national disaster relief, among others.
Barron's reported today that various solar industry stock prices climbed this morning after news that the Senate attached provisions extending the solar investment tax credit 8 years to the bailout bill reached the markets.
Reactions to the Economic Crisis and Bailout Bill
Some Congress members have reported a change in what was overwhelming constituent opposition to the bailout bill after Monday's market dive, saying there has been an increase in constituent support for some sort of bailout. The extent of constituent change of heart is uncertain, especially with the intervening market rebound. Groups opposing the bailout continue to protest with one protest scheduled today in the Russell Senate Office Building and another sponsored by a coalition of citizen groups spearheaded by DC Jobs with Justice at Farragut Square in the nation's capital.
While the U.S. Congress revisits unpopular bailout legislation and an activist and angry citizenry that appears to remain predominantly opposed to the bailout fights their agenda, governments overseas are already asking the United States for an extension of the bailout to create a new global financial system. According to a report in today's Washington Times, the European Union's leadership characterized the U.S. financial crisis as a global problem and said that Washington is responsible for solving it. While EU officials blamed the economic crisis on U.S. policies and business practices, the Vatican attributed it to corporate greed.
If the Senate approves bailout legislation, the Senate bill will then move to the House for round 2.
Sources: http://senateconservatives.files.wordpress.com/2008/10/ayo08c32_xml.pdf; http://blogs.barrons.com/techtraderdaily/2008/10/01/solar-shrs-jump-senate-adds-solar-itc-to-bailout-bill/; http://www.taxalmanac.org/index.php/Sec._162; http://www.forbes.com/home/2008/09/29/mark-to-market-oped-cx_ng_0929gingrich.html; http://www.fdic.gov/deposit/Deposits/insured/index.html; http://latimesblogs.latimes.com/money_co/2008/09/the-angry-debat.html; http://www.thecaq.org/newsroom/pdfs/CAQ_FV-Letter_MOC.pdf; http://www.afterdowningstreet.org/node/36463; http://www.washingtontimes.com/news/2008/oct/01/foreign-economists-prod-us-on-global-plan/.
Published by Carol Bengle Gilbert - Featured Contributor in Travel and Lifestyle
2010 Yahoo! Outstanding Contributor of the Year, Carol has consistently been designated a Top 100 Yahoo! Contributor Network writer. She received a 2008 People's Media Award for "Best Article." Web writing... View profile
- Senate Bailout Bill: Wooden Arrows, Rum and Pork In struggling with the liquidity crisis, the United States Senate seems to have found that it goes beyond banks, investment firms, and even generally small business. It seems that, among others, the manufacturers of w...
-
Did Nancy Pelosi's Speech Blow Up the Bailout Bill?
Did House Speaker Nancy Pelosi blow up the financial bailout bill by making a hyper partisan speech on the House floor in the middle of the debate? There are enough Republicans...
-
Failure of Bailout Bill Shows Lack of Bipartisanship in Congress to Bene...
An editorial about the failed bailout bill and the impact that its failure has on American citizens.
-
Wall St. Bailout Bill Larded with Over $100 Billion in Pork; Includes $4...
The Wall St. Bailout Bill Larded With Over $100 Billion in Pork
- House Defeats $700 Billion Bailout Bill The US House of Representatives have defeated the $700 billion dollar financial services bailout by a 226 to 207 margin. Democrats supported the measure 141 to 91 and Republicans opposed it 66 to 132. Chaos and acrim...
- $700 Billion Revised Bailout Bill Text at Financialservices.house.gov
- Senate Bailout Bill Has Tax Cuts
- New Senate Bailout Bill to Be Voted on Tonight
- Approved Senate Bailout Bill Heads Back to the House
- House Vote on Bailout Bill Reveals Cowardice
- House Passes Auto Bailout Bill
- Bailout Bill Defeated in House
|
|
23 Comments
Post a CommentI'm not sure it's doable - how much bad paper can one government hold, how much unsecured, risky debt can it take on?
TIME TO TAKE IT TO THE STREETS! PROTEST STOP ALL WORK STOP ALL BUYING FOR ONE DAY ...OR SHUT UP AND PAY
Great job!
OH! and Thank You Carol for your Excellent report. I forgot to Thank You after being so PO'd about this MESS....again Great Report.
Thank you for responding to my comment. My concern is that a hasty act adding or modifying regulations could also be a mistake. There may have been valid reasons for repealing some of the regulations. Meanwhile, some form of emergency legislation is clearly needed to reverse the economic trends toward a deep recession. So the question is: How do we fight the recession if the banks remain determined to tighten qualifications for loans, thereby strangling all types of businesses? How do we avoid a stock market and bond market crash that will leave all companies without a method of gaining funds for the short term? New regulations wil not achieve this end.
As always you are on top of things.
Great reporting.
Interesting point about the Senate John but by the same logic this bill should not pass the House, the more direct representatives of the people who appear stil to be overwhlemingly opposed to this bailout. One thing I would say about your emergency argument is that this legislation could have taken many forms- there is no magic to the current version and it is not a good bill. The argument that Congress will deal with details later (not your statement but a theme resounding in some press reports) does not seem genuine. Now is the time to create a bill that does what needs to be done including fund the bill from the problem source and assure accountability. If it is not done now, it most likely will never be done. And with the burden that this bill places on the American public now, the economy can be expected to worsen for the average American.
The Senate should take the time to study the regulations before changing them. The changes we all desire will come after Congress re-convenes. The difficulty was that this crisis does not afford us the luxury of time. Already, businesses are having a hard time getting loans to finance the restocking of their materials. That trasnslates into layoffs. The banks are tightening the restrictions on loans and mortgages, That translates into layoffs. The stores are selling less and the manufacturers' inventory are increasing. That translates into layoffs. The Federal Reserve Board has the power to react to an emergency situation. They did. And that is one big reason why the deep recession has been stalled off. But the danger is far from over. Emergency action is needed by the Congress or thousands of businesses will fail, the unemployment rate will edge upward and millions of people will suffer because of the mistakes of a few. That is why I favor the current bail out.
what a mess super reporting!