The public comment period for this legislation has ended.

Emergency Economic Stabilization Act of 2008

37 section comments

Title I - Troubled Assets Relief Program

Sec. 101. Purchases of Troubled Assets.

  1. OFFICES; AUTHORITY.




    1. AUTHORITY.The Secretary is authorized to establish a troubled asset relief program (or "TARP") to purchase, and to make and fund commitments to purchase, troubled assets from any financial institution, on such terms and conditions as are determined by the Secretary, and in accordance with this Act and the policies and procedures developed and published by the Secretary.




    2. COMMENCEMENT OF PROGRAM.Establishment of the policies and procedures and other similar administrative requirements imposed on the Secretary by this Act are not intended to delay the commencement of the TARP.




    3. ESTABLISHMENT OF TREASURY OFFICE.




      1. IN GENERAL.The Secretary shall implement any program under paragraph (1) through an Office of Financial Stability, established for such purpose within the Office of Domestic Finance of the Department of the Treasury, which office shall be headed by an Assistant Secretary of the Treasury, appointed by the President, by and with the advice and consent of the Senate, except that an interim Assistant Secretary may serve pending confirmation by the Senate.




      2. CLERICAL AMENDMENTS.




        1. TITLE 5.Section 5315 of title 5, United States Code, is amended in the item relating to Assistant Secretaries of the Treasury, by striking "(9)" and inserting "(10)".




        2. TITLE 31.Section 301(e) of title 31, United States Code, is amended by striking "9" and inserting "10".










  2. CONSULTATION.In exercising the authority under this section, the Secretary shall consult with the Board of Governors of the Federal Reserve System, the Corporation, the Comptroller of the Currency, the Director of the Office of Thrift Supervision, and the Secretary of Housing and Urban Development.




  3. NECESSARY ACTIONS.The Secretary is authorized to take such actions as the Secretary deems necessary to carry out the authorities in this Act, including, without limitation, the following:




    1. The Secretary shall have direct hiring authority with respect to the appointment of employees to administer this Act.




    2. Entering into contracts, including contracts for services authorized by section 3109 of title 5, United States Code.




    3. Designating financial institutions as financial agents of the Federal Government, and such institutions shall perform all such reasonable duties related to this Act as financial agents of the Federal Government as may be required.




    4. In order to provide the Secretary with the flexibility to manage troubled assets in a manner designed to minimize cost to the taxpayers, establishing vehicles that are authorized, subject to supervision by the Secretary, to purchase, hold, and sell troubled assets and issue obligations.




    5. Issuing such regulations and other guidance as may be necessary or appropriate to define terms or carry out the authorities or purposes of this Act.






  4. PROGRAM GUIDELINES.Before the earlier of the end of the 2-business-day period beginning on the date of the first purchase of troubled assets pursuant to the authority under this section or the end of the 45-day period beginning on the date of enactment of this Act, the Secretary shall publish program guidelines, including the following:




    1. Mechanisms for purchasing troubled assets.




    2. Methods for pricing and valuing troubled assets.




    3. Procedures for selecting asset managers.




    4. Criteria for identifying troubled assets for purchase.






  5. PREVENTING UNJUST ENRICHMENT.In making purchases under the authority of this Act, the Secretary shall take such steps as may be necessary to prevent unjust enrichment of financial institutions participating in a program established under this section, including by preventing the sale of a troubled asset to the Secretary at a higher price than what the seller paid to purchase the asset. This subsection does not apply to troubled assets acquired in a merger or acquisition, or a purchase of assets from a financial institution in conservatorship or receivership, or that has initiated bankruptcy proceedings under title 11, United States Code.

General Comments on Emergency Economic Stabilization Act of 2008

George on September 28, 2008

This bailout is going just pushing the pain onto our children and grandchildren. Vote no on this and let's get the pain over with now.

CB on September 29, 2008

PREVENTING UNJUST ENRICHMENT This language is a howler. " Preventing Unjust Enrichment." This implies that there could be a "just" enrichment. It implies that there is junk paper that could be purchased from an institution at a profit to that institution.

Basically, this section admits to a possibility that is outside the publicly stated purpose of this legislation.

I guess we know where their heads are even and maby especially now.l

Rafael DeGennaro on September 29, 2008

T.A.R.P. = "Total Abdication of Responsiblity to the Public"

This section is inherently flawed. It cannot be fixed and should be deleted. The government should not be purchasing assets, it should be taking an ownership position in the institution. Buying assets, many of which are derivatives worth nothing, will waste money without directing help where it is truly needed.

If one were trying to improve this provision, one could suggest narrowing the types of "assets" which can be bought, and the institutions they can be purchased from. Others could suggest other improvements. But this approach is fundamentally flawed and such improvements will not make the legislation acceptable.

Exegetic on September 29, 2008

The term "troubled assets" isn't, as one would expect, limited to assets whose is unknown, but suspected to be less valuable than their nominal value. The Act allows "troubled assets" to be any asset whose purchase would, in the Secretary of the Treasury's opinion, would promote stabilization of the financial system. That means that Mr Paulson could purchase quality assets from a illiquid financial institution, as a means to inject capital in that institution. So the term "troubled assets" is somewhat misleading.

Rafael DeGennaro on September 29, 2008

This bill is terrible and should be defeated, with a modest, alternative bill crafted in coming weeks. It is one of the most important congressional votes in many years. Any member who votes for this will wear it around their neck for years to come.

This wasteful use of $700 billion will not save the economy, rather it will harm the value of the US Dollar, which will likely continue to decline. The dollar's decline, in turn, will hasten a crisis in which foreigners are not willing to buy US Treasury bills. When that crisis hits, the US will have to cut spending and raise taxes. At that point, deep in recession, we will wish we didn't pour $700 billion down a rathole.

Philip Jern on September 29, 2008

Interesting that they call this part TARP. At least it's truthful- they'll be hiding it from the light of day- and of course oversight and review.

Norman Schlanger on September 29, 2008

It is significant to note that the term "troubled assets" is not defined. A troubled asset, therefore, can potentially be any asset. This term was no doubt intentionally chosen so as to allow the act to apply to assets other than those that are home mortgage-related. With $700,000,000,000 available to lobby-friendly politicians, this loophole is very likely to be exploited. "troubled assets" needs to be explicitly defined in order to prevent a raid on the treasury by the unscrupulous people and federal agencies who got us into this mess.

Barbara on September 29, 2008

Is it Constitutionally legal for the government to purchase assets from private companies for profit?...isn't that comparable to "gambling" with taxpayer's money?

Bill Burke on September 29, 2008

Maybe you can take a look at the way the markets opened this morning to see how effective this bailout will be. Like shooting rubber bands at the stars. It's unconstitutional. It's illegal. Don't do it.

Judy on September 29, 2008

Limited Government and Economic Freedom.

Sec 101, allows virtually all AUTHORITY to the Secretary, while I have specefic issue with Paulson, I have strong opposition to any individual having such sole authority.

Please define "unjust enrichment" as there should be NO ENRICHMENT, GAIN OR PAYOFF PERIOD!

If this is truly intended to bail out failing mortgages that are failing and should have never been issued to start with, there can be no gain for any individual, corporation, vehicle, instrument etc.

paul lukasiak on September 29, 2008

I too am concerned with the lack of any clear definition for "troubled assets" in this bill, and find the lack of a legal definition extremely odd, given that bills of this type generally do provide specific definitions for what is, and is not, included within the bills purview.

sraa on September 29, 2008

These Departmental Committees have gotten us in this mess in the first place. What's the gaurantee that they will do the job correctly? They weren't doing their job before, we can see how the quality, integrity, honesty, transparency are going to be, in the what 3rd or 4th time around in the last many years.

Lynne Baker on September 29, 2008

This bill is literally Communist! The Secretary has been "in" on this whole banking problem. Does no one see that the Government has ALREADY owned ALL the banks?? They are under so much regulation that they can do almost nothing on their own, that is NOT regulated. Nationalization of private business is socialist, fascist, ANYTHING but the American Way. This is wrong!! Lets give the criminals MORE chances to do wrong..

Rick Barrett on September 29, 2008

"Troubled Asset" needs to be clearly defined. I think an upside down mortgage would qualify if current property assessment validation is submitted.

Mark Hulland on September 29, 2008

We are becomming a socialistic society and that really worries me. How can we continue to pay for these bail outs? Our children will be the victoms of these short sited people that we elected to represent us. It is time to vote them out of office! They for the most part are not doing the job we elected them to do. They helped get us to where we currently are and do not seem to have the ability to do what is correct to move us in the correct direction. It is a shame that they do not put the well being of the country first. To do that they would need to look further out than the next election. The only folks that will benifit are the wealthiest among us. Mr. Buffit will end up getting rid of junk paper at our expence while adding to his wealth. Do not vote this in!

Don Russo on September 29, 2008

What about the poor slobs like me who is going to bail us out? I pay my bills on time I didn’t believe them when they told me “interest only loans are the way to go, or take it home now and you can pay for it later” I always asked what if I can’t pay? What will I do if something goes wrong or I lose my job or get sick? So we didn’t buy that big house, a new car or big SUV, or go on that big vacation. But I should have because now I am and my kids, kids will still be paying for all of those people who did. This bill should only get passed if people like me can spend the next four or five years acting like fools spending it faster then we can make it. Also if anyone is caught with his or hand in the old cookie jar this time it should BE CUT OFF!!!! Greed that is what started all of this and this so called “bailout” is not going to stop that.

Pamela Schottenstein on September 29, 2008

I don't want worthless assets. I want a lien on the real property! HOLC is the only way to go. Refinance folks mortgages so they can pay their bills and let the derivatives gamblers sink! And don't run this through Treasury. They have screwed it up already. Create a HOLC! Shore up FDIC and invest taxpayer dollars in universal single-payer health insurance and creating the green economy for the future. NO wallstreet bailout. Strike TARP and start over.

Jill Swicegood on September 29, 2008

Quit sending our money overseas! If they want a bailout plan give it to "we the people" not to the banks and mortgage companies and certainly not the CEO's for a severance package! If "we the people" are going to be paying for it, as in "middle class America" then we should decide how to spend the money. It is for certain that lower income families and the wealthy Americans will not be paying for this bail out plan.

John on September 29, 2008

I feel we need to discourage this bailout unless we offer significantly less to them. Why reward their behavior? We, the average tax payer, will end up paying for this in some way anyhow. Let's take our lumps and move on.

D.R. on September 29, 2008

This is a setup - less than 2 weeks ago, Bush and Paulson had the gall to tell us everything was fine, when they knew differently (that's called lying). Now they're playing the fear card to rush this through to benefit their rich friends. McCain said everything was fine, too, so he was either ignorant or lying as well)

This bill (or even the one Bush & Paulson wanted) cannot stop what has been set in motion by years of government negligence and denial, which included Reagan's, Bush's and even Clinton's deregulation of the financial industry. And congress went along with it! Of course, they receive hefty campaign contributions from the financial industry.

There are now over $180 TRILLION in derivatives at serious risk of default - and we don't even have the money to pay for THIS bill; we'd have to borrow it, if anyone would be dumb enough to lend it to us. Save this money for the people and small municipalities who are, or will be in need . . .

Dr. Martin Weiss sent a white paper to congress last week, detailing the situation and making recommendations (like not passing this bill). You can read it here: http://www.moneyandmarkets.com/files/...>

The Hogs have at the trough too long, getting richer at taxpayer's expense - let the hogs pay for their own lunch!

Virginia in Arizona on September 29, 2008

We have president, a senate and house that has not represented no one but themselves. Who is blame you are. Only now, did you find it necessary to voice your complaints. If anyone of you are a shareholder did you sign your proxy over to be voted by a member of the board?or did you protest what any board member received in compensation? Only now are you contacting anyone in goverment. Where have you been when they were lighting the matches and setting the fire? did you think you could not be brunt? Well now you are really feeling the heat. But this is nothing , wait until you go to get your paycheck and find, Sorry no money in bank for your paycheck, Your house, Your pension, IRA, 401K, money market, stocks, how much, if any, do you have left? Unless you have a jar full of pennies you have and will lose money in everything that you own.If credit dries up forget using your credit card. Well now the fire is roaring and you had better help put it out before all you have is gone in flames. Alarmist? No! Let me put it like this you go to the store and buy groceries a gas station to buy gas Suppose you can no longer afford to trade there how long will the store and gas station stay in business? If no one purchases the products where you work how long will you have a job? The old story what goes round comes round. Now the senate and the house are still getting salaries and benefits, and everyone knows John McCain feel no pain from lack of money, But you will, now and later. Bail them out we must, it is like you a sister married to a lazy bum and their children are hungry, Well you can either feed them or have then move in with you.What choice are you going to make. We must act. See the bill! Read the bill! Know what you are doing! Then in November Throw out the bums that have been steeling money out of your pocket.No more It's not me it's someone else's' fault. If I have to hear that claptrap again I will regurgitate. It is time to stand up Americans.

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)

john - retired on September 29, 2008

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.

you tell em va in az on September 29, 2008

of course your reps. voted unanimously against it, but this is a classic case of the american public being willing to cut off it's nose to spite it's face. It all starts with not calling it a bailout. The patriot act wasnt called the restrict personal freedoms act because you can't sell that to the people.

Anonymous on September 30, 2008

This section giver the US taxpayer a double-hit. assets will be purchased by the government and I assure you they will be bought for a premium price...someone will be making some money off this. Later the assets will be sold by the government and I assure you they will be sold at a bargain. The government (you and I) will lose again. You can bet the buyer will prosper. There will be a significant gap between the purchase and sale prices.

John Johnsen of TBO on September 30, 2008

This law authorizes the federal government (a very few in the government) to run the entire U.S. economy. How? It starts with a definition. 'Troubled Assets' Read it. It's not just mortgage securities, its "...ANY OTHER FINANCIAL INSTRUMENT..." that the Secty of the Treas. determines the purchase of which 'promotes financial stability' (with no definition as to what 'fanancial stability' is). I'll tell you what financial stability is. It's when I get my $90mil from my buddies in congress, a la Franklin Raines (Fanny May I) and dissapear to the Islands until the cover-up is complete. Of course is does not include sole propriertoships - So if I want to stay moral, I'm safe. This is an open ended power grab by the Federalies, why else would Barney, Nancy and Christopher vote for it?

TBO Trow d'Bums Out! (all of them) John

alvin on September 30, 2008

One we shouldn't be buying troubled debt

two if we do buy troubled debt there should be no exclusions in sub-section e this is a loop whole for corporate elite. They can profit by over pricing their failed takeovers and pawning the loss off on the people

usmc1966 on September 30, 2008

There is no indictment in the Wall Street executive, no indictment in 9/11 and no indictment of all those that participate the bill for Freddie Mac & Fannie Mae.

Easy choice for all the above is to committ Hara-Kiri to save face and I help pay for their funeral.

Hank

Tony V. -- Tucson, Arizona on September 30, 2008

This entire plan is full of subjective language that fails to provide the accountability that American's desperately need. I thought members of the House and Senate have law degrees? Apparently not, as no one with a law degree would use language that is so general, open-ended and lacking accountability.... right?

I will summarize my opinion about the fundamental causes of this crisis in the following three paragraphs. Hopefully, if enough people agree as to the causes, we can converge upon realistic long-term solutions.

1) Our government has fallen asleep at the wheel, and not just the current administration, but administrations over a period of decades. They have allowed lenders to take advantage of many American's appetite for credit. Now that the crisis has escalated to point of no return, our government leaders don't even have the fortitude to tell the American public the truth; that, as a whole, “We” are a major reason for the current crisis.

2) The leaders of our major financial institutions have failed to take on the same responsibilities that most American business leaders must abide by. If you break the law and steal money, you will go to jail. Instead, our largest financial institutional leaders are rewarded with lavish retirement bonuses and perks.

3) Finally, many Americans have become financially irresponsible. We have failed to teach our children the importance of living within our means. We have failed to teach the basic equation of income vs. borrowing and spending. If we had properly taught our children to borrow and spend responsibly, we would not be in this crisis.

In short, I believe the bail-out plan is a dangerous, short-term, band-aid. It can only serve to give us a false sense of security. It won't solve the root causes of our crisis or change the kind of thinking that led to the problems outlined above. A bail-out will only deepen our crisis and seal our long-term fate.

Sincerely, Tony V. -- Tucson, AZ

B. Norris, Illinois on October 1, 2008

Any bill of this magnitude should already have some specific items defined corresponding to the four points in 101.d -- if it's possible to define the operational details in 45 days or less, why is it not possible to at least hint at them in the legislation? This seems to leave all the specifics up to the Secretary of Treasury, an appointed individual, and while he may be a fine individual, it seems like an awful lot of discretion to grant to one person.

David C. Knoxville,TN on October 1, 2008

If we are going to pass some kind of 700 billion dollar bill anyway,why does it have to be this? I propose this: Instead of paying the banks and financial institutions first,like a "Top-Down" approach, why not start by giving the money to the American people,doing a "Bottom-Up" approach? President Bush continues to say that this affects people that have retirement portfolios, college loans,car loans, small and large businesses that use credit to pay their payrolls and invoices,and finally the home owner that purchased a "Sub-Prime" mortgage,and has now lost or losing their home. Not one sentence in this bill says that there is going to be any relief in the form of mortgage bailouts.

1. Put a large chunk of this 700 billion into the Social Security system. That way,if all the financial institutions fail,the people that lose all or most of their nest egg,will still be able to recieve money to pay bills.Many of these retirees have already paid off their mortgages,and use Social Security to pay for necessities,like food,house taxes,electric and water bills,and phone bills. I'm sorry that these same people will not be able to live in style,but when you invest in a portfolio,you sign a paper that tells you that you may lose all your money investing in this. When you sign it,you understand that you may make money,but could lose everything.

2. Put 100 billion or so into making more government college grants,and allowing easier access to these grants, by making ALL students that apply, not just underprivilaged, low income students, the ability to recieve these grants based on the grades that they make. If you do right in school, and make good grades,like a b-average, and you or your parents don't have,or lost, the money to put you into school, than you should be able to get a grant.

3. Small business owners know that they pay taxes every month, dealing with sales. and other factors. Why not letting them NOT pay these taxes ,letting them keep this money,so that they may be able to pay staff salaries and invoices on a weekly to monthly basis. This will cost the government 200 or 300 billion in taxes that they would normally recieve, but this makes sure that said businesses don't have to ask these bad banks for credit lines. If you can't pay for your company without credit,than you should not have a business to begin with. These tax breaks will let them keep all their money, and use it to further, or keep afloat there business. If that same business can't keep up, WITH these tax breaks, than they go out of business, just like businesses do day after day.

4. Make the bill a trillion dollar bill, which it may become anyway, and give 300 billion directly to the American People, giving each person approx. $10,000 dollars. Every single of the 350 million American people,children included, get $10,000 dollars. ALL OF THIS WILL STIMULATE THE ECONOMY, AND REDUCE THE NEED FOR CREDIT OF ANY KIND. Vote No on the Financial Market Bill, H.R. 3997.

Nathanael Nerode on October 1, 2008

Contains no actual provisions to "handcuff" the untrustworthy Treasury Secretary. If he behaves recklessly and irresponsibly, there is nothing in this section which will stop him! Absolutely nothing! Lots of "Please behave yourself" and "Mail reports to these people" provisions, but no actual ability to stop bad behavior!

That is, of course, unacceptable.

Harry Rice, Individual on October 1, 2008

This legislation should require that sales proceeds from the sale of any residential property foreclosed on by lenders must first reimburse all liens filed by condominium and homeowners associations for nonpayment of monthly maintenance fees before such proceeds go to reimburse any lenders for the unpaid balance of the mortgage note.

The lenders and borrowers were responsible for most of these bad loans through improper underwriting,fraudulent appraisals and falsification of income. The Associations are left holding the bag through no fault of their own. The courts are backed up with the shear number of foreclosures and the lenders are in no hurry to take title to the property because maintenance fees would be paid by the lenders on a going forward basis.

Don on October 1, 2008

There's no way that we should allow the purchase of unsecured derivatives under this plan. Propping up legitimate mortgage-backed securities is repugnant enough but guaranteeing the payment on what are essentially insurance policies that can pay out face value multiple times on the failure of debts that the "insurance policy" doesn't even own?

That's insanity. CDSes are bets, plain and simple, and for us to promise to pay out on them is repugnant.

David C. Knoxville,TN on October 1, 2008

Tonight,this bill passed the Senate by a 75 to 25 margin. We as Americans have just given Secretary Paulson more power than both the Senate,and the President have,COMBINED. The only thing that he can't do, is begin a war. Oh,I'm sorry, if he decides to give loans to one Country's bank ,let's say Israel, and not to let's say, Iran ,than I guess that Paulson does have the power to start wars. That's exactly why the Homeland Security sections are in the bill. we have just added around $4000 dollars to each of our children and grandchildren, for the sake of the wealthy banks, that if you think they are going to open up credit lines,you are sadly mistaken, because that's how and why Fannie Mae was created. They wanted to sell homes to people that could never afford them to begin with, in an effort to create more real estate sales, and to get low-income families into homes, and out of housing projects. well, we all see how that turned out. Now we bail out the banks, and send these former home owners back to the housing projects.

Julie Stucky on October 2, 2008

It will be interesting to see which fox Bush picks to guard the hen house:

The Secretary shall implement any program under paragraph (1) through an Office of Financial Stability, established for such purpose within the Office of Domestic Finance of the Department of the Treasury, which office shall be headed by an Assistant Secretary of the Treasury, appointed by the President, by and with the advice and consent of the Senate, except that an interim Assistant Secretary may serve pending confirmation by the Senate