Democrats Demand Changes to Bailout Plan

Democrats in Congress say they will be adding to the $700b bailout plan according to a New York Times report "Democrats Begin to Set Own Bailout Terms ".

Congressional Democrats say they plan to include more oversight through the Treasury of companies receiving the bailouts, help for homeowners at risk, and limits to the pay of top executives receiving money from the plan.

I think the top of Paulson's head just went towards the ceiling at a hundred miles an hour. He's been working the talk shows 'splainin' how we need to dole out the money, now and with no strings attached.

But there is more if one looks on the second page.  Not only will Democrats in Congress seek to control future earnings at companies receiving bailouts, but also 

Under a so-called claw-back provision, the secretary would have the power to force companies to recoup previous payments to executives of companies involved in the program. And Mr. Frank’s plan would give broad authority for the Government Accountability Office, an investigative arm of Congress, to audit and oversee the program.

Paulson wails about companies seeing the bailout plan as punitive if such a provision is inserted.  But the secretary himself gets to decide how to control that part of the program or as McCain calls it "to oversight it", as in (paraphrased) "when I was head of the commerce committee, I oversighted all parts of the economy". Unfortunately for people's confidence in McCain's thought processes the Commerce committee doesn't oversee the financial sector.  Otherwise he would have "overseen" those parts of the economy, not "oversighted".

More on Democratic proposals:

Senator Jack Reed, Democrat of Rhode Island, has proposed a provision that would grant the government warrants to purchase stock in companies that participate in the bailout plan, so that taxpayers might be able to profit should the firms flourish after selling their bad debts to the government.

As Speaker Pelosi said:

“We will not simply hand over a $700 billion blank check to Wall Street and hope for a better outcome!” 

Oh Darn!  I was going to drop by next week, myself, and see if they could spot me a couple mil for a few decades.

BTW:

Both presidential nominees, who face the prospect of inheriting an enormous new government program, said there had to be more oversight of the Treasury Department than the Bush administration had proposed.

Hey, you mean even John McCain feels like we're being railroaded into something like the invasion of Iraq once again? I agree with their idea though.  Oversight needs to be grounded under someone who needs to be re-elected.

The report notes that Repbulicans say they are looking out for the taxpayer:

Congressional Republicans, too, put the Bush administration on notice that they would not rubber-stamp the bailout proposal but would insist on a number of changes, including specific protections for taxpayers. Those would include a requirement that any profits from the program be returned to the Treasury.

But House Minority Leader Boehner is proposing his usual 'throw money at fat cats and be done with it' plan according to the second page of the report:

Representative John A. Boehner of Ohio, the House Republican leader, said on ABC: “We don’t need 535 members of Congress adding their best idea. We need to keep it clean, simple, move it through the House and Senate, and get it on the president’s desk.”

But interestingly a paragraph earlier in the report says:

Aides to senior House Republicans said that lawmakers would also demand greater oversight of the program and were proposing a joint select committee, consisting of members of both parties and both chambers of Congress.

So which is it Mr. Boehner?  Do you want to mold the legislation as the Dems do, or do you want it passed as is?  Or is one position used while in Congress and the other one used while out campaigning?  

Read full NYT article for full details on the fun Congress will be having instead of going on vacation early to start campaigning.  (Wait.  Didn't they just get back from August vacation which was extended to  cover the Republican convention?)

Boy, wasn't it lucky the whole financial crisis thing didn't happen during one of the vacations, or after the election when Bush would be really lame duck or next year when President Obama's or McCain's Secretary of State might not want to dish out so much money.  They couldn't have fudged the timing on this thing could they?

tags: treasury secretary  henry paulson  wall street bailout  republicans  democrats  

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