Another reason why the deal is good:
Among the last sticking points was an unexpected and bitter fight over how to pay for any losses that taxpayers may experience after distressed debt has been purchased and resold. Democrats had pushed for a fee on securities transactions, essentially a tax on financial firms, saying it was fitting that they contribute to the cost.
In the end, lawmakers and the administration opted to leave the decision to the next president, who must present a proposal to Congress to pay for any losses.
Barack Obama and all Democrats should support the proposed fee and promise the American People that Wall Street will pay for its mistakes, not the American People. This should ALSO become a centerpiece of the Obama economic campaign.
Another reason to support this proposal:
[T[he government would receive an equity stake in companies that seek aid, allowing taxpayers to profit should the rescue plan work and the private firms flourish in the months and years ahead.
No free rides for Wall Street. If this bailout saves their bacon, then the American People get thier money back and then some.
Another reason to support this proposal:
The White House also agreed to strict oversight of the program by a Congressional panel and conflict-of-interest rules for firms hired by the Treasury to help run the program.
This was of course mandatory and there would have been no deal without it but it makes the proposal doable.
Here is the part that hurts, and yet, the structure makes it acceptable:
The centerpiece of the rescue effort remains the plan for the government to buy up to $700 billion in troubled assets from financial firms as a way to free their balance sheets of bad debts and to help restore a healthy flow of credit through the economy.
The money will disbursed in parts, with an initial $250 billion to get the rescue effort under way, followed by another $100 billion upon a report by Mr. Bush to Congress.
The president could then request the balance of $350 billion at any time. If Congress disapproved, it would have to act within 15 days to deny the Treasury the money.
This is a $350 billion plan right now. It will not become a $700 billion plan for the next President, who should be Obama and who should enact HOLC.
Finally, the chance to make Republicans foolish is always a plus in any proposal, and this part will do that:
Officials said they had also agreed to include a proposal by House Republicans that gives the Treasury secretary an additional option of issuing government insurance for troubled financial instruments as a way of reducing the amount of taxpayer money spent up front on the rescue effort.
First, Paulson said the idea was ludicrous. Second, it is ludicrous unless the government gives the insurance away for free, which is the original bailout. Third, this was McCain's baby, and we can make fun of him for it.
In the end, if Democrats FIGHT for what they believe in, starting with Barack Obama, the groundwork is laid for a decent plan for getting out of this mess.
By Big Tent Democrat, speaking for me only
