Lawmakers Examine Details of Tentative Financial Markets Deal

By Dan Robinson

28 September 2008

U.S. lawmakers and the Bush administration have reached an agreement on a plan to bailout endangered financial institutions. VOA's Dan Robinson reports, the announcement came from key House and Senate negotiators, and from the U.S. Treasury Secretary Henry Paulson, early Sunday after around-the-clock negotiations.

Under the proposal, the federal government would provide the $700 billion originally requested by the Bush administration to purchase mortgage-based securities and other assets from troubled financial firms.

But Congress would provide it in portions, $250 billion immediately, $100 billion upon approval by President Bush, and $350 billion when the Congress gives it final approval.

In addition, the plan would set some limits on pay received by executives of firms participating in the bailout, a critical point for lawmakers who faced a wave of complaints from their constituents over multi-million dollar corporate salaries.

The plan would create an oversight board to maintain accountability and report to Congress. It would also take steps to prevent more Americans from losing their homes, and make it possible for taxpayers to obtain equity stakes in financial firms.

After virtually around the clock negotiations since last week, congressional leaders appeared in the Capitol along with U.S. Treasury Secretary Henry Paulson.

"We begin with a very important task," said Henry Paulson. "A task to stabilize the markets, to protect all Americans and do it in a way which protects the taxpayer to the maximum extent possible."



Chris Dodd chairs the Senate Banking Committee:

"We are at a point where I think we can say something positive to the American people and others who are waiting to hear that we can come out of this crisis and protect, as pointed out earlier, the people who depend upon our government and these financial services to give them the jobs and the security they seek," said Senator Dodd.

Congressional aides are working to transform the agreement into legislation the House and Senate will debate and act on this week.

House Republicans, whose demands for changes and objections to an agreement last week, appear to be raising no roadblocks at this point, but stressed they will be closely examining the details.

Republican House whip Roy Blunt:

"House Republicans were very concerned this [past] week that we do everything we could to bring both free-market principles and protections for taxpayers to the table and other people in these negotiations wanted to do many of those same things," said Congressman Blunt.

Other components of the plan include a mechanism to tax companies taking part in the bailout if the government is still suffering losses after five years, in order to further protect taxpayer dollars.

House Financial Services Committee Chairman Barney Frank said the legislation was, in his words, never going to be a deal that would make people happy, but is as good a product as Congress could come up with:

"It includes genuine compromise, an idea originally proposed by the Bush administration and then subject to a process in which other points and values were added to it," said Congressman Frank.

Congress and the Bush administration hope the agreement will add confidence to U.S. and world financial markets when they open Monday.