Yesterday I posted the news that we had all been waiting to hear. Congress had finally come to an agreement and had settled on a bailout deal to help jump-start our faltering markets. The price tag? A mere $700 billion dollars.
At the announcement of proposed deal the Dow Jones industrials enjoyed a 196-point gain to close the day.
And then news started trickling out last night that the deal – was certainly no deal at all… yet. From the AP
Sen. Richard Shelby, of Alabama, the top Republican on the Senate Banking Committee, emerged from the session to say the announced agreement “is obviously no agreement.”
House Republicans have been balking at the proposed deal. The deal, they say, is too expensive and it places too much of the weight of the bailout on the taxpayer's shoulders.
One group of House GOP lawmakers circulated an alternative that would put much less focus on a government takeover of failing institutions' sour assets. This proposal would have the government provide insurance to companies that agree to hold frozen assets rather than have the U.S. purchase the assets.
Rep Eric Cantor, R-Va., said the idea would be to remove the burden of the bailout from taxpayers and place it, over time, on Wall Street. The price tag of the administration's plan to bail out tottering financial institutions — and the federal intrusion into private business matters — have been major sticking points for many Republican lawmakers.
When looking at the price tag for the bailout, it does make one wonder why other options haven't been explored. Why is it automatically assumed that we the taxpayers MUST foot the bill? And is this huge $700 billion bailout really all necessary? Would we be able to give things a helping hand with say – half that amount?
What IS agreed upon is that we have some serious problems right now, and something needs to be done.
There is wide agreement the U.S. economy is in peril, with financial institutions going under or near the edge and recession looming along with the resulting layoffs and increased home foreclosures.
“All of us around the table … know we've got to get something done as quickly as possible,” Bush told reporters, brought in for only the start of the meeting. Obama and McCain were at distant ends of the oval table, not even in each other's sight lines. Bush, playing host in the middle, was flanked by Congress' two Democratic leaders, House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid.
McCain and Obama later said they both still expected an agreement could be reached.
Under the accord announced hours earlier among key lawmakers, the Treasury secretary would get $250 billion immediately and could have an additional $100 billion if he certified it was needed, an approach designed to give lawmakers a stronger hand in controlling the unprecedented rescue. The government would take equity in companies helped by the bailout and put rules in place to limit excessive compensation of their executives, according to a draft of the outline obtained by the Associated Press.
What form would you like to see any proposed bailout take? A $700 billion taxpayer financed bailout where the government takes over troubled assets, or something more along the lines of the government providing insurance to those companies willing to hold onto the assets?