Monday, September 22, 2008

Political News: Chris Dodd Bailout Plan Has Merit

Good Morning Bloggers - It's early, but for now I'm supporting Senator Christopher Dodd's (D) plan over the not-so-great track record of Bush and Paulson. Politico posted a decent review earlier, and there have been many critiques online and elsewhere since that really impressed me today. I wish you guys would give your opinion. It's important to the nation.

Dodd bill more aggressive than Treasury plan
"Banking Committee Chairman Christopher Dodd is taking [a] much more aggressive approach to the Treasury bailout plan, demanding foreclosure assistance, limits on executive compensation and profit sharing for taxpayers if the Treasury begins to make money back on the bad debt it plans to purchase."

legislation, obtained this morning by Politico, has just started to circulate among Senate legislative directors. His plan addresses many of the concerns raised by Democrats and Republicans who are concerned about handing over $700 billion blank check to Treasury Secretary Henry Paulson."

"While the Treasury would receive much of the authority that it wants to buy up distressed assets, Dodd's add-ons have many of the populist ideas that will appeal to skeptical Democrats. His plan is also broader than the one unveiled by House Financial Services Chairman Barney Frank (D), so there will be significant negotiations in the days ahead between the House and Senate if Congress is to pass a bill by the end of the week."

"Among the major provisions Dodd is adding:
  • Authority for bankruptcy judges to restructure mortgages for homeowners facing foreclosure. This was considered a poison pill in a housing bill that passed Congress earlier this summer, but it has gained much more currency now that Washington wants to bail out Wall Street.
  • A provision that would require the Treasury to take a 65 percent portion of 20 percent any profits it makes from the newly purchased assets and put it into the federal government's HOPE program, an affordable housing program.
  • An oversight board that not only includes the chairman of the Federal Reserve and the SEC, but congressionally appointed, non-governmental officials.
  • Limits on executive compensation. This is a major stumbling point for Paulson in his negotiations with Congress, but cracking down on Wall Street executive salaries will be a major selling point for lawmakers. Dodd and Frank have put in place what's known as a "claw back" provision aimed at revoking compensation that executives received based on fraudulent claims.
  • An independent inspector general to investigate the Treasury asset program, appointed by the president."
At first glance I think it sounds more aggressive and sensible than Paulson's plan, which requires us to trust people and institutions that have already proven to be incompetent. The most important consideration is that Goldman Sachs Group - formerly run by Treasury Secretary Henry Paulson - and Morgan Stanley, stand to be among the biggest beneficiaries of his proposed, unregulated $700 billion bailout.
Common sense suggests caution. I hope you share your thoughts. I already wrote my congressman and both Senators requesting caution and oversight. Because it's important to our nation and future generations, I hope you do the same. Simply Google the legislators name and you'll find them. I must admit, I'm extremely worried.

Tuesday's Political News #1 - Michael

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