Jeanne Sahadi, CNNMoney.com reported about the economic rescue bill.
The government will be looking at $700 Billion in a bailout plan which includes the following provisions:
Among the provisions of the draft bill:
- The $700 billion would be disbursed in stages, with $250 billion made available immediately for the Treasury's use. The public needs to know what the $250 billion be used for by the treasury.
- Curbs will be placed on the compensation of executives at companies that sell mortgage assets to Treasury. Among them, companies that participate will not be able to deduct the salary they pay to executives above $500,000. It is not clear whether compensation will include stock-options, and other types of compensation other than salary. Salary alone for most of the financial institutions is not the greatest area of compensation. There needs to be clarity as to how much in total compensation we are looking at, not just salary.
- An oversight board will be created. The board will include the Federal Reserve chairman, the Securities and Exchange Commission chairman, the Federal Home Finance Agency director and the Housing and Urban Development secretary. Regulation is inevitable in times of crisis. Limiting the oversight to a few people is rather useless. There has to be a committee which includes members of the public.
- Treasury is allowed the option to take ownership stakes in participating companies under certain circumstances. Isn't this much like socialism? If the government owns a stake in the companies, it also defeats the free market theory which this country was built on.
- Treasury may establish an insurance program - with risk-based premiums paid by the industry - to guarantee companies' troubled assets, including mortgage-backed securities, purchased before March 14, 2008. The public needs to know that this additional mortgage insurance will be paid for by the public, and in turn will be passed-on as a cost of purchasing property.
- One provision requires the president to propose legislation to recoup losses from the financial industry if the rescue plan results in net losses to taxpayers five years after the plan is enacted. a easy way to solve this problem is to have the banks write-down the bad loans they gave and give all the poor people who were talked into getting these outrageous loans they could not afford a cut in the principal sum.
Mina N. Sirkin is a Family Wealth Lawyer and a TV Legal Expert in Los Angeles, California. Ms. Sirkin is a Board Certified Specialist attorney in Estate Planning, Probate and Trust Law by the State Bar of California. MSirkin@SirkinLaw.com. http://www.SirkinLaw.com
