Sketchy details of the tentative deal reached to bail out the banking industry are beginning to emerge. As I write this the deal was announced about a half an hour ago (a little after 1am) so It may have to be updated later today. The draft agreement includes:
- Katheryn Lopez of NRO is reporting that the ACORN provision, giving 20% of potential profits to the group convicted of election fraud in so many states is NOT IN THIS DEAL
- The draft agreement assures Paulson a relatively free hand in accessing the first $350 billion of the $700 billion he sought. The second $350 billion could be blocked by a future Congress through a joint resolution signed by the president.
- Lawmakers agreed to drop the requirement that these funds could not be available until three months after enactment of the bill.
- Lawmakers won substantially greater oversight that Treasury had first allowed in its legislation submitted to Congress last week.
- Limits would be imposed on the pay and severances packages for executives at companies helped by the plan.
- The measure also opens the door to allow the government –on behalf of taxpayers—to take an equity share in the companies it helps, either through warrants or options to buy stock.t
The Two Major Compromises that were worked out on Saturday night were
- Democrats had proposed that the Treasury be required to impose a fee on Wall Street transactions to help cover the cost of any government losses as a result of the rescue plan. But Republicans and Treasury resisted, and the final compromise calls for the next president to submit a legislative proposal to Congress in four years, after some assessment can be made of the costs to the government.
- The Republican proposal that the government intervene in the markets, not by buying up bad assets but by providing a federally backed insurance program that might make the same mortgage-related securities more salable. The compromise reached would require Paulson to set up such an insurance alternative if he goes ahead with his plan, but he is not compelled to use the insurance option.
Source Politico and NRO