Dem Lawmakers Muddy Up Financial Rescue Bill
Underlining by TBV
Democrat’s Senate Counterproposal:
The proposal, offered up by Senate Banking Committee Chairman Christopher Dodd, D-Conn., would require companies who sell assets to Uncle Sam to give the government shares in the company, according to a draft obtained by CNN.
The Senate Democrats’ proposal would also require the government to come up with “a systematic approach for preventing foreclosures and ensuring long-term, sustainable homeownership through loan modifications and use of the HOPE for Homeowners Program” on the mortgages it buys in the bailout.
The Dodd proposal calls for curbs on executive compensation and a change to federal law so that judges can modify a bankruptcy filer’s primary residence mortgage. Under current law, judges may only modify loans on second homes. The lending industry has strongly opposed such a provision.
Lastly, the Dodd proposal would terminate Treasury’s special authority to buy up troubled assets by Dec. 31, 2009. By contrast, the Treasury’s proposal calls for termination two years from the date of enactment.
Bush Administration’s Response:
Meanwhile, the Bush administration is pushing for a “clean” bill to be passed quickly and not be loaded up with provisions that would deter companies from participating.
“[T]he whole world is watching to see if we can act quickly to shore up our markets and prevent damage to our capital markets, businesses, our housing sector, and retirement accounts,” President Bush said.
The Senate Banking Committee will hold a hearing on the bailout proposal on Tuesday, while the House Financial Services Committee will do the same on Wednesday. Paulson and Bernanke are scheduled to testify at both hearings.
