The Speaker issued the following statement very early this morning. Overall it looks pretty good considering where the economy is today. As always, the devil is in the details.
(Reuters) - The following is a statement issued by U.S. House of Representatives Speaker Nancy Pelosi's office on changes to the Bush administration's $700 billion financial rescue plan request. Congressional leaders conducted a marathon negotiating session on Saturday before announcing they had a broad outline of a deal. Here is the statement issued early on Sunday:
Significant bipartisan work has built consensus around dramatic improvements to the original Bush-Paulson plan to stabilize American financial markets -- including cutting in half the Administration's initial request for $700 billion and requiring Congressional review for any future commitment of taxpayers' funds. If the government loses money, the financial industry will pay back the taxpayers.
3 Phases of a Financial Rescue with Strong Taxpayer Protections
- Reinvest in the troubled financial markets... to stabilize our economy and insulate Main Street from Wall Street
- Reimburse the taxpayer... through ownership of shares and appreciation in the value of purchased assets
- Reform business-as-usual on Wall Street... strong Congressional oversight and no golden parachutes
CRITICAL IMPROVEMENTS TO THE RESCUE PLAN
Democrats have insisted from day one on substantial changes to make the Bush-Paulson plan acceptable -- protecting American taxpayers and Main Street -- and these elements will be included in the legislation
Protection for taxpayers, ensuring THEY share IN ANY profits
- Cuts the payment of $700 billion in half and conditions future payments on Congressional review
- Gives taxpayers an ownership stake and profit-making opportunities with participating companies
- Puts taxpayers first in line to recover assets if participating company fails
- Guarantees taxpayers are repaid in full - if other protections have not actually produced a profit
- Allows the government to purchase troubled assets from pension plans, local governments, and small banks that serve low- and middle-income families
Limits on excessive compensation for CEOs and executives
New restrictions on CEO and executive compensation for participating companies:
- No multi-million dollar golden parachutes
- Limits CEO compensation that encourages unnecessary risk-taking
- Recovers bonuses paid based on promised gains that later turn out to be false or inaccurate
Strong independent oversight and transparency
- Four separate independent oversight entities or processes to protect the taxpayer
- A strong oversight board appointed by bipartisan leaders of Congress
- A GAO presence at Treasury to oversee the program and conduct audits to ensure strong internal controls, and to prevent waste, fraud, and abuse
- An independent Inspector General to monitor the Treasury Secretary's decisions
- Transparency - requiring posting of transactions online - to help jumpstart private sector demand
- Meaningful judicial review of the Treasury Secretary's actions
Help to prevent home foreclosures crippling the American economy
- The government can use its power as the owner of mortgages and mortgage backed securities to facilitate loan modifications (such as, reduced principal or interest rate, lengthened time to pay back the mortgage) to help reduce the 2 million projected foreclosures in the next year
- Extends provision (passed earlier in this Congress) to stop tax liability on mortgage foreclosures
- Helps save small businesses that need credit by aiding small community banks hurt by the mortgage crisis - allowing these banks to deduct losses from investments in Fannie Mae and Freddie Mac stocks.
Office of Speaker Nancy Pelosi -- September 28, 2008
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