The public comment period for this legislation has ended.

Emergency Economic Stabilization Act of 2008

58 bill comments, 140 section comments

On Sunday, September 28, congressional leadership issued the Emergency Economic Stabilization Act of 2008, posted online (in PDF) by Speaker Pelosi and by the House Financial Services Committee. This bill is the latest version of Congress' gigantic taxpayer bailout of the financial sector, with a potential cost of $700 billion or more than $2000 per American citizen. We believe, as Justice Brandeis said, that "Sunlight is the best of disinfectants," and that all legislation ought to be open to public comment and consideration in real-time, not just after the fact. So, as a public service, we're posting the 110-page text for public comment.

Tell Congress to Read the Bill First! Click here to sign Sunlight's petition. Demand they take at least 72 hours to read the bailout bill!

Read and comment on the Senate's most recent bill, posted October 1, 2008.

  1. TITLE I - Troubled Assets Relief Program
    1. Sec. 101. Purchases of Troubled Assets. (37 comments)
    2. Sec. 102. Insurance of Troubled Assets. (6 comments)
    3. Sec. 103. Considerations. (3 comments)
    4. Sec. 104. Financial Stability Oversight Board. (8 comments)
    5. Sec. 105. Reports. (1 comment)
    6. Sec. 106. Rights; Management; Sale of Troubled Assets; Revenues and Sale Proceeds. (2 comments)
    7. Sec. 107. Contracting Procedures. (7 comments)
    8. Sec. 108. Conflicts of Interest. (3 comments)
    9. Sec. 109. Foreclosure Mitigation Efforts. (2 comments)
    10. Sec. 110. Assistance to Homeowners. (12 comments)
    11. Sec. 111. Executive Compensation and Corporate Governance. (17 comments)
    12. Sec. 112. Coordination With Foreign Authorities and Central Banks. (1 comment)
    13. Sec. 113. Minimization of Long-Term Costs and Maximization of Benefits for Taxpayers. (1 comment)
    14. Sec. 114. Market Transparency. (2 comments)
    15. Sec. 115. Graduated Authorization to Purchase. (5 comments)
    16. Sec. 116. Oversight and Audits. (2 comments)
    17. Sec. 117. Study and Report on Margin Authority.
    18. Sec. 118. Funding. (1 comment)
    19. Sec. 119. Judicial Review and Related Matters. (1 comment)
    20. Sec. 120. Termination of Authority.
    21. Sec. 121. Special Inspector General for the Troubled Asset Relief Program.
    22. Sec. 122. Increase in Statutory Limit on the Public Debt. (2 comments)
    23. Sec. 123. Credit Reform.
    24. Sec. 124. Hope for Homeowners Amendments.
    25. Sec. 125. Congressional Oversight Panel. (6 comments)
    26. Sec. 126. FDIC Authority.
    27. Sec. 127. Cooperation With the FBI. (1 comment)
    28. Sec. 128. Acceleration of Effective Date. (4 comments)
    29. Sec. 129. Disclosures on Exercise of Loan Authority. (1 comment)
    30. Sec. 130. Technical Corrections.
    31. Sec. 131. Exchange of Stabilization Fund Reimbursement. (1 comment)
    32. Sec. 132. Authority to Suspend Mark-to-Market Accounting. (5 comments)
    33. Sec. 133. Study on Mark-to-Market Accounting. (1 comment)
    34. Sec. 134. Recoupment. (2 comments)
    35. Sec. 135. Preservation of Authority.
  2. TITLE II - Budget-Related Provisions
    1. Sec. 201. Information for Congressional Support Agencies.
    2. Sec. 202. Reports by the Office of Management and Budget and the Congressional Budget Office
    3. Sec. 203. Analysis in President's Budget.
    4. Sec. 204. Emergency Treatment.
  3. TITLE III - Tax Provisions
    1. Sec. 301. Gain or Loss From Sale of Exchange of Certain Preferred Stock. (1 comment)
    2. Sec. 302. Special Rules for Tax Treatment of Executive Compensation of Employers Participating in the Troubled Assets Relief Program. (5 comments)
    3. Sec. 303. Extension of Exclusion of Income From Discharge of Qualified Principal Residence Indebtedness.

General Comments on Emergency Economic Stabilization Act of 2008

Stephen Larson on September 28, 2008

Question about the definition of financial institution in this bill:

The term "financial institution" means any institution, including, but not limited to, any bank, savings association, credit union, security broker or dealer, or insurance company, established and regulated under the laws of the United States or any State, territory, or possession of the United States, the District of Columbia, Commonwealth of Puerto Rico, Commonwealth of Northern Mariana Islands, Guam, American Samoa, or the United States Virgin Islands, and having significant operations in the United States, but excluding any central bank of, or institution owned by, a foreign government.

Does this include or exclude Deutschebank and UBS? Because if it includes them, then I think it is terrible that we would use money from the U.S. Treasury to help them out!!

Anonymous on September 28, 2008

Vote no on this bill unless it is amended as follows: No Taxpayer money should go to buy CDOs or CDSs at any price. They should be marked to market (i.e. near worthless fraud) and sold to Vulture funds that can liquidate them. Taxpayer money should go into the FDIC where it is needed to insure depositors and reorganize the banks, many of whom are doomed to fail. Create a fund to invest in reorganized banks on Warren Buffett's terms or change laws to put the taxpayer investments first before bond holders and all classes of shareholders. Make 80% loan to value mortgages based on honest appraisals available to every credit worthy person who needs one. Make sure this never happens again. Buying toxic assest or insuring them is a complete waste of Taxpayer money.

Rafael DeGennaro on September 29, 2008

How long will members of Congress and the public have to read this bill? They should have at least three days, but may not even get 24 hours.

Speaker Pelosi specifically promised that members and the public would have 24 hours to read the bill before it was brought up on the House floor. House rules require three calendar days, but that "three-day rule" is waived routinely by both Democrats and Republicans. (For the record, the House Republican majority in recent years did not even allow 24 hours for important bills like the Medicare drug bill, Patriot Act, etc. so nobody should get partisan about this issue.)

Members and the public may not have 24 hours to read the text. Even 24 hours is utterly insufficient for a measure of this cost, scope and importance, especially since there were no committee hearings, committee markups, or House and Senate versions to later reconcile. Important: the clock should be understood to mean 24 hours before the beginning of CONSIDERATION on the floor, not 24 hours before the VOTE.

Under House rules, the clock on time to read BEGINS when the bill is made available. The bill was posted on the website of the House Financial Services Cmte Sunday evening sometime. I was unable to obtain the text at http://financialservices.house.gov (timed out) until about 8:10 pm EDT. Speaker Pelosi said at the 5:25 pm EDT press conference that the bill was online "now", so perhaps others were able to get it a bit sooner (did anyone get it sooner?) Even at 7:17 pm EDT, NYTimes reporter Paul Krugman posted on his blog that there were multiple versions of the bill around, and he seemed not to have identified the final at that time.

Under House rules, the clock measuring time to read ENDS when the bill is called up for consideration on the floor, which is now expected sometime Monday. The House may be inclined to rush because the Jewish holiday begins at sundown Monday evening. (Sundown on Sept. 29 is at 6:54 pm EDT, according to the Washington Post.) More importantly, the leadership wants to jam the bill through before the citizen revolt spreads.

Dem02020 on September 29, 2008

As we look at the proposed trillion dollar appropriation out of the U.S. Treasury to WALL STREET, I'm drawn to what I think is the single most important consideration in this matter, which is actually nothing you will find in the text of the Bill: and that is the NEED for this bailout, or more specifically, the supposed CONSEQUENCES we would suffer, were this extraordinary sum of Public Money not siphoned off to these private WALL STREET companies.

Specifically, I hear how "our jobs will be lost" and "our savings will be in jeopardy"

I ask you:

How do you imagine the failure of a company like Merrill Lynch to cost you your job, and toss you out on the street?

Truly, can you see the cause and effect relationship, the mechanics of such a thing?

I cannot!

Dem02020 on September 29, 2008

continued... All of the WALL STREET firms so far, and all of their troubles so far, have not made me once to think I will lose my job because of them! I can't see how my boss would give me a pink slip and say "sorry, but another WALL STREET financial company has gone under, or another WALL STREET investemnt fund is insolvent: I have to let you go because of that"

Can you honestly say you can see how that will happen to you, can you explain the cause and effect, the mechanics, of such a thing?

Because I cannot!

And the same is true of my savings, and my house too: I absolutely fail to see the nuts and bolts mechanics of how those things will be lost, if these various WALL STREET firms are forced into Chapter 11, or otherwise absorbed into bigger and more solvent companies (as Merrill was) for pennies (30 cents or so) on their former stock dollar... which is and was a loss to Merrill stockholders and officers and employees, but not to me!

Why would I have wanted to bailout out Merrill? Why would I want to bailout other WALL STREET companies just like them, in the same trouble they were in?

Dem02020 on September 29, 2008

continued some more... This is bullchit... these people are trying to convince us that there are CONSEQUENCES here that will jeopardize our jobs and savings, yet they do not describe how this is so, and try as I might, I cannot imagine the mechanics of it happening!

And again, what I spoke of there, is nothing that can be found or will be answered, by reading the proposed bailout Bill.

That needs to be (I think) the focus of our opposition to the Bush Paulson WALL STREET scheme to steal a trillion dollars of our money (and leave us with higher taxes across the board, double digit inflation, and reduced federal spending)...

The focus needs to be for us to insist on a real and convincing explanation of exactly how we will lose our jobs and our savings, if WALL STREET firms like Merrill Lynch aren't bailed out by us...

Because Merrill Lynch wasn't bailed out, and neither their troubles nor their Bank of America solution to those troubles, ever once made me concerned for my job or my savings: and so why would I feel the same way about the remaining WALL STREET firms with their "troubled assets", just because the former CEO of Goldman Sachs has effectively scared the stupid wits out of the absolute worst spectacle of a political opposition the American People have ever had to endure, the present idiot Democratic Congressional leadership?

Explain the CONSEQUENCES that jeopardize my job and savings!

Because otherwise, I think that bullchit is just a fear-mongering tactic to steal a trillion dollars of American taxpayer money from the U.S. Treasury!

Dan on September 29, 2008

Of course, it may be "$2000" per American. But in practice, nearly all taxes are paid by a much smaller group. It would be good to have a calculator where you put in your income and it shows you your share.

Also, this bill does nothing to stop the actual practices on wall street that lead to the problem...

allie mcneil - a voter, taxpayer. on September 29, 2008

the pdf in the link does not work- and I have been having trouble accessing it online- they do need to put a cleaner and workable link- and also they need to make it downloadable- so people can sit and read it...and print it or save it and come back to it.

the Cheeses- NO GOLDEN PARACHUTES at all!! and homeowners do need protection..I have tried to read it, but two different members of the house said that they will be making less millions and be taxed ???is that true ? then that means Nothing...it means they get away with the mess they made.

the FBI Investigations of 26 Entities NEED to Continue- the Freddie, Fannie, and Lehman and AIG Investigations NEED to continue..

H.James Mowrey on September 29, 2008

The federal government is acting in the role of "enabler" once again. Until those people who make bad financial decisions suffer the consequences of those decisions, they and others like them will not change their ways. This is like a family member making excuses for the alcoholism on another family member or buying them their next bottle of booze. Just as cutting off welfare benefits to welfare queens finally forced a large percentage of them to get off their fat butts and go to work, providing financial benefits to those who practice bad financial behavior is rewarding their bad financial behavior.

I also can not find in the U.S. Constitution where the federal government is supposed to be coming to the financial rescue of private institutions. Did I miss that?

Lawrence Bowie on September 29, 2008

Glass-Stegall Act of 1933, separated the business of lending institutions and securities institutions. I have not read through all of this new act, but if you think about it, if separating the 2 businesses from each other is what lifted the country out of the Great Depression then, then why is it any different now, before we drop into a depression??

In my opinion, we are just exacerbating the problem by giving the Secretary sole arbitration rights to hand-out billions of dollars. I strongly believe we have not addressed the issues at hand. I believe that the financial institutions are still allowed to conduct business as a lending and securities business, collectively. Is that not part of why we are in this mess in the first place?? Why do they think they can still do conduct business in both industries without any consequences?? Have the legislatures not learned from the past??

Anonymous on September 29, 2008

NO! ABSOLUTELY NOT! I AM SPUTTERING MAD! WELFARE FOR THE WEALTHY?! ARE YOU KIDDING? THIS SOLUTION DOES NOT FIX THE PROBLEM NOR THE GREED.

If any of my representatives vote for this bill, I will not be voting for them come re-election. By the way, I have the great fortunate of having voted for all of my current representatives.

I am fiscally and environmentally responsible. I don't use credit or debt as a daily societal tool. Therefore, I do not own my own home even though we EASILY qualify for loans. Several years ago, we almost bought a house with our own money; but this was at the beginning of the current economic instability and we thought it would be more prudent by retaining liquidity. Beginning last year, we sold all of our 401k and stocks, only preserving our IRA's. We are not market savvy. We hold no economic degrees. But we always have a sense of what will happen.

We have cut our income by 75%, are frugal, have cut our expenses to bare minimum. We garden organically in an apartment setting - which makes the best use of land and resources. We have separated our wants from our needs and live according to our needs, not our wants. We still do live, but, we do not provide for every want nor every comfort. We have a richer life than with one of excess. We are a family of four.

I'd say we have a great deal of responsibility and more comfort than most other countries provide for their citizens. Yet, the people being fiscally responsible are forced to pay for an indulgent and irresponsible hierarchy? That is called a monarchy or dictatorship. If this is what we have come to, then be truthful in your title - THIEVES.

Dem 07403 on September 29, 2008

Why are American taxpayers being forced to borrow $700 billion (or more) from the Chinese and Middle Eastern countries to bail out these fools and criminals?

If they're not credit worthy enough to borrow on their own, let them go down. I say we should go with HOLC and take care of bad home loans only. The rest should not be the taxpayers responsibility.

Jim Brown on September 29, 2008

NO bailout!!!! It is completely unconstitutional. By subsidizing failure you will only get more failure. It is immoral to forcibly take away wages from one person and give it to another.

Avery C. Mac Cracken on September 29, 2008

When are we collectively going to do violently overthrow our treasonous unconstitutional government! I am ready, armed, supplied and more than eager. Are there any White red blooded American Males left with BALLS? I am one. Please respond we have work to do. Most Sincerely, Avery C. Mac Cracken American Constitutional Patriot That's right! Stand Up & In Their Face

Zak Carter on September 29, 2008

“If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks...will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered... The issuing power should be taken from the banks and restored to the people, to whom it properly belongs." Thomas Jefferson

Don - Houston on September 29, 2008

The quote from Thomas Jefferson sums up my attitude regarding this toxic legislation. Representatives should be running away from this legislative sell-out like it was some kind of political bubonic plague.

Scott (www.Delcoforliberty.com) on September 29, 2008

This is not a bill originated by the elected officials of the United States of America. This proposal originated by the executive branch and was not put through the proper legislative procedures necessary for all bills to become law. Therefore this bill is illegal and should be removed from the roster of bills up for approval by the elected officials of the United States of America.
This proposal originated from the fraudulent Federal Reserve System who was established by the illegal Federal Reserve Act and any such illegal organization operating under an unauthorized Act should be sent to jail for treason against the United States of America.
This proposal is a treasonous coup of power by the private corporation known as the Federal Reserve System and all of the people who engineered the crisis by unloading liquidity, forcing specious mortgage procedures, allowing derivatives and over issuing credit to the understood detriment of the United States of America need to be brought to trial.

Lawrence Bowie on September 29, 2008

Zak .. I was going to post the same statement by Jefferson ... He is correct and you are astute ...

We just do not learn from the past, and we are bound to repeat it with even a harder fall.

Tess, Conservative Republican on September 29, 2008

We the American people know what is going on here, this is more Corporate Welfare, and another jab at the middle-class taxpayers. It is a shame that you all have been influenced by a man who was head of Goldman Sachs (Paulson). We have allowed these big investment bankers to steal the wealth from America once again, and now we are repaying them by bailing them out. Remember, Iraq was going to be $200 Billion, and now it is well over a Trillion, when are the Representatives we have elected going to listen to their constituents?

90 percent of the American public are totally against any form of bailout period. We know that this country will have at least a year before we recover ecomomically if we do nothing, but if you continue put bandaides on an infection it will only continue to fester.

Say NO to this bailout bill period. This is a temporary fix, we will need Trillions to stop the bleeding especially if we will bailing out foreign investers too, just say no.

Randy Dixon on September 29, 2008

How will the government pay for this? Yes, it will be taxpayers money eventually but it currently has a $500 billion deficit, a $9 trillion current account deficit and God only knows how much in unfunded liabilities. The entire mortgage crisis was created by the creation of credit without sufficient collateral, this placed the financial institutions at risk. We are now being asked to have the government fund this, without sufficient collateral, putting the entire country at risk. This is insanity. Vote No on any Bailout, Rescue Plan or any other panic driven, poorly thought out, power grab.

Susan Smith on September 29, 2008

Yes, unfortunately the bill was changed to allow recovery by any foreign financial firm that does business in the US. As a lowly taxpayer you might be surprised to know that the Treasury Dept. held a financial firms analysts call last night. This lets them know details about how they will benefit without bothering the American people. On the call were UBS, Deutsche Bank, Royal Bank of Scotland, and many other with what are nearly worthless morgage derivates. Also present were many hedge funds, most of whom have had a terrible year, and hold frightening amounts of credit default swaps. While there are barriers to immediate withdrawl of investors money in hedge funds, by next quarter many will be insolvent - but wait - despite early vehement objection to their inclusion by the Democrats they are back in the final bill. Objective financial analysts place the cost of keeping the derivatives bomb from ef at five trillion dollars, (the ridiculous, criminal value of the derivatives that are held now is more than 500 TRILLION dollars.) Yes, unfortunately the bill was changed to allow recovery by any foreign financial firm that does business in the US, and don't expect any mortgage assistance from this piece of garbage. If they bought mortgages they could do what they wanted, but as one of number of bond holders it is illegal to modify the terms of the SPV.

If you would like to hear the call yourself, and listen to the boys at Treasury laugh at Congress,

http://dealbreaker.com/2008/09/live-blogging-the-treasury-cal.php

Jim Jones on September 29, 2008

This bill is nothing more then an attempt to nationalize our banking system, just like what’s happening around the world our government is trying to socialize our country, the democrats are the major cause behind this problem, and for some reason bush thinks this will help the country. We are on the verge of electing possibly a socialist in Obama to the white house in Nov. VOTE NO ON THIS BILL, AND VOTE NO TO OBAMA

freespeech on September 29, 2008

There are alternatives which are better and REQUIRED in the stabilization. The top economists- more than 160 of them had sent congress a letter stating exactly that. paulson and bernanke are NOT top economists for America or we would NOT be here today discussing this "piece" of legislation. No socialism. No bailout today PERIOD. This "updated" bill is TRASH and even those on the floor admit that. Voting for the lesser of two evils is still evil.

Mark Atkins on September 29, 2008

This package SUCKS. It merely bails out the banksters, congress, and the administration for years of mis-management and poor decisions at the expense of the taxpayers.

This is TREASON and the "perps" need to be punished, NOT bailed out!

Bobby Voiceofreason on September 29, 2008

Provisions to eliminate the obscene "golden parachutes" are not adequate. The amount of funds Chris Dodd and Barney Frank received from lobbyists for the financial interests are equally obscene. The banking community owns these two clowns. This should never happen again, and the number one priority should be campaign finance reform.

Eric K on September 29, 2008

This is the point in our American History where our elected officials can decide if they are servants of the Constitution and 'We the People' as they swore oaths to be, or if they are servants of the International Banking Crime Syndicate figure headed by the posturing pretender president-would be dictator, George Bush. The spotlight is on you, we are watching as you turn your back on all that is the United States of America.

Cindy on September 29, 2008

This bail out is unconstitutional just like much of the legislation on the hill. Most Americans oppose this bail out and therefore congress should listen. What we are seeing today is the overgrowth of the federal government. These banks and security institutions should be allowed to fail. Let the market cleanse itself. The taxpayer should not foot the bill in any way.

Karen Tripp on September 29, 2008

I am opposed to a governmental take over of anything. Do not pass this bill. Instead take every member of the committees involved in both the Senate and House and take them off the committees. It's obvious that the inmates are running the asylum.

Bob Black on September 29, 2008

Shove that bailout up your ass!

The tree of liberty must be refreshed from time to time with the blood of patriots and tyrants. --Thomas Jefferson

The civil war is coming, save your cash and keep your powder dry

mogwai on September 29, 2008

I'm certain the federal tax is voluntary and I'm fairly certain I'm not volunteering any tax dollars to fund these bums.

MSNBC GUY on September 29, 2008

Proposal. Use the money instead to buy up the mortgages of people who are in default because of interest rate adjustments. Offer the banks say 65% of the mortgage value (that's probably all they are going to get if they foreclose). Write a new mortgage at a moderate interest rate. The mortgage becomes an asset owned by the government, the homeowner gets to stay in their home, foreclosures which are destroying home values are stopped, and the banks get some of their money back. The government gets the money back as the homeowner makes payments. If the homeowner defaults again the government owns the house and can sell it. Unlike the wall street bailout where the government will not likely see a dime back. Also this proposal helps the little guy and not the Wall Street fat cats.

Email Your Reps and Senators and Tell Them NO to Bailing Out Wall Street! Tell Them You Will Vote for Their Opponent.

Alann on September 29, 2008

I think they are approaching the problem from the wrong side. Start at the bottom end the homeowners.

I would think the correct approach would be to: 1) Provide federal financing options to any homeowner, say 80% financing on a 30yr basis with an annual adjusted rate based on 2% above the 10yr treasury bond yield. If this beats your present mortgage the market has been ripping you off. 2) To the banks offer to buy up any mortgage at approximately the equivalent value of a foreclosure (get experts to provide a percentage which will make this just slightly more attractive than foreclosure). Let the government handle the foreclosure and provide as many opportuntities as reasonably possible to the homeowner. 3) Make sure these options are available to as many people as possible including houses that may have already been foreclosed on, but have not been resold yet. 4) Understand that there are still going to be large losses, but that is the reality of business and in the conditions under which the debt was sold. If companies believe they were sold bad debt under false pretenses they should be suing the sellers, all the way back to the issuer and the agent which prepared the mortgage if need be.

Bill Ball, American on September 29, 2008

This is a sad day. Nanci Poloci gave a VERY PARTISIAN speech (it's on YOU-TUBE). I dont know how many times she said the term "$700,000,000,000 dollars!!!" She was obviously trying to get her point across that she DID NOT WANT the bill to pass, thus 40% Dems voted agaist it.

THANK YOU REPUBLICANS!! for taking a stand for US, the poor saps who will end up paying the bill anyway. I think I may have heard that there was $1,000,000,000 for Amtrack pork-barrelled in the bill.

Rockefeller, Morgan, Bush......hope you enjoy being in bed together.....because WE ARE SICK & TIRED OF IT!!!!!!!!!!!!

Tricia on September 29, 2008

First of all, Jim Jones, Senator Obama is not responsible for our present financial problems and you certainly do not have to vote for him. There is no reason why we should bail out these wall street fat cats, in fact, they should be held responsible for fleecing the American public. I am sure they already have millions if not billions of dollars already. When does the greed stop?! On top of insult to injury these CEOs are holding us hostage for more dollars???? Forget it, I say lets penalize them and charge them a massive penalty for running the country into financial ruin and then, and only then can they try to redeem themselves by trying to turn this mess around. If not, let them go to prison. The lack or regulation has permitted these folks to run rough shod over us. These self serving types are about as anti-American as you can get. They are all for themselves regardless of the cost to our country. Let's wake up America we cannot afford to be trusting and or naive.

Bill in Houston (individual) on September 29, 2008

Just the tax provisions alone make me glad I'm retired from that business...I don't really know if the Golden Parachute provisions are constitutional, but if something like this passes, look for financial restatements from differences in interpretation for the next few years.......too much discretion handed to treasury on rules supposedly effective now in concept, but actually later until treasury gets the regulations out....won't be a vote on those regs, either........typical and sad......

Shawna Weinheimer on September 29, 2008

Please, Please take the time to actually understand what you are voting for! Don't give in to the politics of it for once and actually do what you feel is the best thing for your consituency!!

john - retired on September 29, 2008

Does anyone know if full funding for FDIC (up to 100k) is in this bill? That's what I'm most concerned about at this point. (Along with getting a new Speaker of the House.)

Why wasn't ALL the debate on this bill on CSPAN?? This is not a matter of National Security, and we the people (that pay the salaries of these Representatives) have a right to see whom and what we're paying for!! Is there even ONE person in the House in favor of this? If so, why don't they speak up?

This would be the surest way to stop the SPIN and get to a fair and honest debate on an wrong but necessary act.

Jon Millenson on September 29, 2008

Rachel:

I heard that those in the House that were up for re-election tended to vote "no" and those that were not tended to vote for it. How can we get this bill passed now as is?!

Jim Kidney (private citizen) on September 29, 2008

Anyone who believes in MARKETS must accept the fact that market prices may not be what one would like them to be.
Suspending Mark-to-Market accounting encourages fraud and deception. It leads to an overstatement of a company's assets.
If I say "my house cannot be sold for what I think it's worth", what does that mean? Should I then expect the government to buy it for more than the going price in the marketplace?

Ed Morgan (Main St., U.S.A.) on September 30, 2008

Thank God HR3997 failed. I am stunned by the perfidity of the "free" press, and our elected representatives. I doubt many had actually read the bill when they began extolling its virtues. I cannot believe that treachery is so rampant. More likely, it's the multitudes being led by a corrupt few. Had the bill passed, it would have been the demise of free enterprise and democracy in America. It would have ushered in an era of totalitarianism.

C Platt on September 30, 2008

Does anything about this... "No time to think, this is a National Emergency of epic proportions... trust me, I know what I'm doing, hand me the keys and your wallets, we're taking the right action, don't ask any questions" ...sound familiar? I think history will reveal that Bush was a great deceiver. Didn't any body else see Michael Moore's movie, "Fahrenheit 9/11" just before the last election? How did he get re-elected?

I have no doubt whatsoever that the economy is going to suffer really seriously no matter which way we go at this point. The big question is who can we trust to make it hurt the least now that the current government has already screwed the pooch? Do we throw good money after bad, or let evolution cull out the losers? I know nothing about investments, having chosen to stay clear of them. People like me are totally at the mercy of those in the know to understand the ramifications of what will happen if we do the bail-out scheme or not. I suspect that even the most astute still find it too complicated to accurately predict the fallout on the public majority either way. It's probably like trying to guess what would happen to individual animal species in an ecosystem if you either kill off all of one species of tree or another. The scientists can only speculate.

Tough problem! Smart economists may think they know what to expect, but ultimately may be surprised no matter which way this is handled. I neither trust nor envy the Congress right now. This sure looks like a case of damned if you do and damned if you don't. It's going to so easy to point later and say, "look how bad this is, it's all your fault for making that lousy decision"!

Pray that God's plan keeps you safe, because the other plan isn't looking so good right now!

r0k on September 30, 2008

Suspend this thing until after the election. Simply put it on hold and ride it out. Nobody is being honest about the solution to this problem as they look over their shoulder and worry about re-election. I really don't want a piece of legislation committing my children, grandchildren, great grandchildren to a debt crafted by a lame duck president who turned a surplus into the biggest deficit in history and a congress that is too busy posturing and name-calling to craft legislation that actually does something. There are rosy passages about safeguards but no substantive means for protecting our money. I'm not normally one to rush to agree with conservative republicans but this bill might just be the exception. I'd rather lose some now than vote away my future because I'm afraid to face what I might lose.

Scenario 1: market tanks by 20-30% with no bailout and crawls back over several years.

Scenario 2: market bounces back after revised bailout plan with no huge debt purchased blindly by the fed.

Scenario 3: market tanks by 20-30% despite bailout and crawls back over several decades because of the sheer magnitude of the debt we took on

Scenario 4: market tanks by 80-90% because we sit around and argue about whose fault it is.

I'll take 1 or 2 but experience shows we're headed for 3 or 4.

Michael Griffey (www.michaelgriffey.com) on September 30, 2008

Has anyone even considered the unconstitutionality of this bill or any other insane form of "bailout" of private companies? The law requires Congress to state in the bill where in the Constitution they derive the right to act on this, but apparently they suspended that rule. Must be nice to be able to be demi-gods whenever you want, right?

Maybe I'm in the wrong line of business.

It seems to me that something else nobody is really talking about is how the executive and legislative branches in collusion with the Federal Reserve have been artificially inflating the markets...and when the market tries to correct, they artificially bloat it more. Now we are facing a recession because the bubble has become so large. It WILL burst, people. We need to let it happen and live with real money in a real economy...not the dreamworld that big government has created.

Elise Krueger, Krueger Ranch, Mahtowa, Mn. on September 30, 2008

Please stop calling it a bail out. Find a better description as most of the folks in this country "do not understand what their congresssmen are voting for". DO NOT CARRY THIS WITHOUT THE VOTES FROM THE REPUBLICANS. They are playing you like a drum. They want to duck the responsibility, and have the dems make the decision and carry the weight on their shoulders. DON't let them sucker you in.

Shirley Cupani, Mesa, AZ on September 30, 2008

This bailout is nothing but a con game from Bush and Paulsen, trying to terrorize us into letting them do something totally unethical, and contrary to American ideals!!!
If they want a FREE MARKET, then by definition, these mismanaged businesses, must be allowed to FAIL!!! These people just see another opportunity to rip off the American taxpayer! The credit crisis is a separate problem. Sell Treasury notes, and put the money into the economy through fiscally sound banks! Watch out for the Republicans to force the introduction of NO regulation and NO capital gains taxes in return for their signatures. You have to admit Republicans have a lot of nerve, but then they will obviously do anything for money, and the money of their contributors.

David Bacon, Shelby Twp, MI on September 30, 2008

Any company that can afford to pay millions to executives for just a few weeks of work, doesn't need "bailing out".

This whole thing sounds as bad as the "earmarks" routine we have.

The inmates have taken over the asylum...

Joe Milisits(retired) on September 30, 2008

Citizens

It is our Congress. We elected them to represent us. They are a partisan collective failure. The economic crisis that they were blind to is the greatest threat to our nation. They and the thieves on Wall Street are the real terrorists and a more serious threat to all of us. The 435 representatives and their 10 to 15 person staffs should stay in session in Washington for the duration of the problem, working 12 hour days, 7 days a week. (435x 10= 4,350 personnel) If they choose to go home, tell them to stay there.
I propose that we charge them to implement the following on the nation's behalf:

  1. A foreclosed mortgage immediately turns an income producing asset into an immediate liability. Therefore: If we as a people are going to have to bail out the corrupt Congress and the financial thieves on Wall Street by assuming their bad loans, then we should seize all of the loans and collect all of the mortgage payments into a National account until the problems are resolved.
    That would start with a temporary reversion to the original interest rates of all loans so that we can stop the foreclosures and the subsequent pain to the homeowner and our national treasury. This would be a temporary solution, giving us time to correct the problems instead of adding to them. Meanwhile the nation (we the people) and the treasury can start o recover.
  2. It would also stop the continuing siphoning of profits on the good mortgages to the perpetrators of the crisis while they shift the losses on the bad loans to us Demand that the executives of the companies that created the bundled Collateralized Debt Obligations to unbundle them within 30 days or face the same penalties of death that we accord to worldwide terrorists. Right now no one knows the collective value of these bogus instruments.
  3. Freeze all personal assets of all Wall Street executives until we uncover the felons that caused the problems. Make no mistake, this was not an innocent, randomly devised scheme, but a well planned deception foisted on all of us by greedy executives leveraging government loaned monies by factors of 30 to 40 times in purposely designed untrackable financial instruments. Once again, we will not be able to count on the representatives who were elected to serve the citizenry to make any meaningful decisions that will protect us or get the treasury in order. As always, they will make promises to investigate what went wrong and promise to keep it from happening again. Same old same old.

As for credit card rates, cap them at 9.9% so the consumer has at least a chance of paying off some of the principal rather than becoming a virtual lifetime payer. If the lenders cannot make money by charging 9.9% while borrowing from the Fed at 2% , they should not be allowed to issue credit card debt.

J Todryk on October 1, 2008

If this bill passes without having a provision in it for a Bankpuptcy Judge to have the ability to write down the loan amount and the interest rate for an individual that is filing for Chapter 13 Bankruptcy is a huge mistake. These homeowners are in a world of hurt already because of extenuating circumstances such as loss of job or Medical probles and not neccessarily because they overextended themselves in the first place when the bought their home. These people would, I believe, be selling their current home except for the fact that they CAN NOT sell off the asset because it has declined so much in value as they would loose money and be unable to buy a smaller or less expensive home, in light of this real estate resession, which as we all know was caused by the market bubble created by misdealings of people in Freddie and Fannie and other Companies that deal in Mortgage Backed Securities. So it is the fault of the very people that stand to gain the most by this Bailout (Wall Street) The victims are the homeowners that have lost an emense amount of the value of their current residence and are now going through the embarassment of Bankruptcy JUST TO SAVE THEIR HOMES! They are the ones that are mostly affected by these sharks. These homeowners have an ability to pay most of the secured debt they have signed for or they would not qualify to file for a Chapter 13 to reorganize their debt. Chapter 13 regs allow the BK Judge to mark down other secured debt, like car loans etc.. Why not at least temporarily allow for these adjustments for those hit hardest by the current situation. I believe this will take care of alot of the problems with this meltdown, more of a bottom up approach, than even the bailout provisions to the Bigboys on Wallstreet because my understanding is that $50 billion of mortgages are defaulting MONTHLY right now and that needs to slow down. I believe this could help solve this crisis in a very simple manner, without costing all of us alot of money. After all, these are the assets backing the Mortgage Backed Securities we are bailing out, they are directly linked and in need of an adjustment. This would prevent alot of forclosures from coming to fruituion, keep the income stream moving to support and retain the value of the Mortgage Backed Securities, and ease the pain of alot of people hurt by this problem.

Citizen April in Florida on November 7, 2008

It's pretty scary how many posts show no understanding of how interconnected various financial instruments are. Rescuing financial institutions goes well beyond Wall Street to our local bank and yes to our employers.

Individuals and businesses (employers, pensions, municipalities etc) deposit money in the bank. The reserve requirement was 10% for several decades, meaning the banks could lend 9 times the deposits for business loans, mortgages, etc. The interest is how they make money (ESPECIALLY on mortgages). The $1000 becomes $10,000 ($9000 lent out, plus the 10% on deposit).

Banks also lend each other money overnight to meet their nightly reserve requirements. Gigantic companies like GE and GM also lend and borrow overnight, short term (30-120 days), etc. Usually this is for day-to-day expenses and it may include payroll. Mutual fund companies are enormous participants in overnight, 7-day and short term lending. It funds their money market accounts. This is the primary reason when Lehman Brothers (and their money mkt accounts) was allowed to fail, it became a run on the other institutions. Hedge funds, state and corporate pensions, 401(k)s, 403(b)s, insurance companies, and personal investors are heavily invested in money markets. Please understand that it is a SACRED RULE on Wall Street for a money market fund to NEVER UNDER ANY CIRCUMSTANCES fall below $1, even if the firm takes a beating on the underlying investments. For one fund to fail is an across-the-board emergency.

It did not help matters in the slightest that the reserve requirement was loosened, just when interest rates reached record lows. Everyone could borrow money for next to nothing. And the securities firms plowed into CDSs. I don't know much about them, but the basic premise is an investor may have reason to believe (or fear) that the bonds issued by a company may fail. A contract is drawn, a premium paid, and if in fact that company can't make good on paying off those bonds, the investor makes money.

However, being unregulated, no one knew how much risk was really out there, or if the CDS issuers could pay off massive waves of claims.

It's surprising that collaterized debt securities were completely unregulated. Clever, yes, but without oversight even our country's best ideas can run away from us and blow up everywhere.

If you felt pinched by the credit freeze, suddenly the underpinnings of all these firms around the world become directly related to you personally, and you can't believe it!

So think about it. We live in a capitalist nation. There is nowhere you can go to buy anything - a Twinkie or a mansion or a business - without US currency. So for anyone to think that Wall Street the Money Industry Itself should be allowed to fail is living in a clueless condition. Where do you think money comes from? The ATM?

Lisa P, (Payday Cash) on November 17, 2008

The freedom of speech should be exercised in related situations. What could be its greatest effect on the economic situations? Do we hope that Treasury Secretary Henry Paulson might use a generous portion of the $700 billion bailout plan’s funds to help out consumers with their devaluing mortgages? IA good chunk of the remainder is going back into the consumer credit market, such as car loans, student loans, and credit cards. Since it is a form of consumer credit, payday cash loans should be getting a portion, but there will be none made available to that industry, whose usual customers have either no credit or credit difficulty? Paulson wants normal avenues for consumer credit to remain open; these normally open lines of credit have become far slower or even frozen with “illiquidity.” Has anyone else seen what is going on here? Paulson has admitted a mistake with the earlier strategy of the plan, including massive banking bailouts. We do have to pick up the pieces and move forward, but certainly some things could have been avoided. However, government officials are doing something right by encouraging investors to return to the market with the bailout. If the investors return, then confidence and jobs could start returning to the world market, and fewer people may have to rely on payday cash in tough times.