Fatter Bailout Bill Will Increase National Debt to $11.3 Trillion
for 24-Hours of Propaganda
"I'm so excited! My $700 Billion Spending Spree is about to begin!"
After one devastating and spectacular failure, the $700 billion financial industry bailout found a second life Wednesday, speeding toward passage in the Senate and gaining ground in the House where conservative opposition seemed to soften.
Senators loaded the economic rescue bill with tax breaks and other sweeteners for the right and left, hoping to secure approval in the House by Friday, just days after lawmakers there stunningly rejected an earlier version and sent markets plunging around the globe.
Both presidential candidates, Republican John McCain and Democrat Barack Obama, were making rare appearances to vote their support. That would send the package back to the House, where passage would require a turnaround of 12 votes from Monday's 228-205 defeat.
"See, what we are going to do is take $2400 from each and every human being in the United States, and use that money to give free houses to all the subprime deadbeats who never should have had a house in the first place."
Leaders in both parties, as well as private economic chiefs everywhere, said Congress must quickly approve some version of the measure to start loans flowing and stave off a potential national economic catastrophe.
"Inaction is not an option," Senate Majority Leader Harry Reid of Nevada said a few hours before the Senate was to vote. "This is not a bailout for Wall Street. It's a bailout for our country."
President Bush said, "It's very important for members to take this bill very seriously."
Congressional leaders targeted the 133 House Republicans who voted against the bill Monday.
"Just because people can't read a contract, or understand the terms 'variable' and 'adjustable', or go to work and pay their bills, doesn't mean we should take away their homes. Foreclosures need to stop! Free houses for everyone!"
Senator Chris Dodd, Chairman of the Senate Banking, Housing, and Urban Affairs Committee, said after the Senate passed the Bailout Bill, " The Emergency Economic Stabilization Act will not only provide stability and confidence to our financial markets, but also will help American families who are struggling to make ends meet. The legislation gives the Treasury Secretary the authority to respond quickly and forcibly to the current crisis, while creating strong protections for American taxpayers, helping to preserve the American dream of homeownership, and cracking down on excessive compensation for corporate executives who made bad decisions."
“Many Americans are confused and angry about this crisis – and rightfully so. They are concerned about whether this solution is best for their families and the nation. I want to assure the American people that this legislation was created for the families who are worried about their home values, their retirement savings, and how they are going to afford groceries, medicine, and gas. These bipartisan efforts weren’t about the storm that hit Wall Street – they were about the gathering storm on Main Street. Tonight, the Senate acted decisively and responsibly – not for the benefit of a chosen few, but for all Americans.”
Dodd also announced the enactment of the HOPE for Homeowners program, a voluntary initiative to help distressed borrowers refinance their mortgages. “Each day, more and more American families and communities are forced to cope with the devastating effects of foreclosure. Starting today, many Americans who are struggling to keep their homes will have a new tool at their disposal – HOPE for Homeowners. This program will enable hundreds of thousands of American families who are trapped in bad loans – often the result of predatory lending practices – to convert their mortgages into new, affordable loans. With mortgages they can afford, homeowners will be better equipped to keep their homes and stave off foreclosure."
“HOPE for Homeowners is a major step forward in our efforts to address the root cause of our economic crisis – the foreclosure crisis. I will continue to monitor very closely the effectiveness of this program in preserving homeownership. When Congress passed the Housing and Economic Recovery Act, we sent a message to Americans that help was on the way. For hundreds of thousands of American families, today’s enactment of HOPE for Homeowners means that help has finally arrived.”
Constituent feedback changing dramatically since Monday's House defeat and the corresponding market plunge, allowing lawmakers' comfort level with the package to increase markedly.
"We Want Our Free Houses!"
Most American's are still unclear exactly what the Bailout will consist of, and who it will help.
Despite the common misperception, those who have seen their retirement accounts, stock portfolios, and other related investments plunge and/or lose their entire value will not be compensated in any sort of direct fashion. There is no forthcoming second round of "Economic Stimulus" checks coming.
What will happen is perhaps thousands, maybe hundreds of thousands, of subprime borrowers who have defaulted on their homes--which is where the financial crisis originally took root--will get their homes virtually for free, punishing all of the hard-working American's who have borrowed and spent responsibly.
SUMMARY OF THE “EMERGENCY ECONOMIC STABILIZATION ACT OF 2008”
I. Stabilizing the Economy
The Emergency Economic Stabilization Act of 2008 (EESA) provides up to $700 billion to the
Secretary of the Treasury to buy mortgages and other assets that are clogging the balance sheets of financial institutions and making it difficult for working families, small businesses, and other companies to access credit, which is vital to a strong and stable economy. EESA also establishes a program that would allow companies to insure their troubled assets.
II. Homeownership Preservation
EESA requires the Treasury to modify troubled loans – many the result of predatory lending
practices – wherever possible to help American families keep their homes. It also directs other
federal agencies to modify loans that they own or control. Finally, it improves the HOPE for
Homeowners program by expanding eligibility and increasing the tools available to the
Department of Housing and Urban Development to help more families keep their homes.
III. Taxpayer Protection
Taxpayers should not be expected to pay for Wall Street’s mistakes. The legislation requires
companies that sell some of their bad assets to the government to provide warrants so that
taxpayers will benefit from any future growth these companies may experience as a result of
participation in this program. The legislation also requires the President to submit legislation
that would cover any losses to taxpayers resulting from this program from financial institutions.
IV. No Windfalls for Executives
Executives who made bad decisions should not be allowed to dump their bad assets on the
government, and then walk away with millions of dollars in bonuses. In order to participate in
this program, companies will lose certain tax benefits and, in some cases, must limit executive
pay. In addition, the bill limits “golden parachutes” and requires that unearned bonuses be
V. Strong Oversight
Rather than giving the Treasury all the funds at once, the legislation gives the Treasury $250
billion immediately, then requires the President to certify that additional funds are needed ($100 billion, then $350 billion subject to Congressional disapproval). The Treasury must report on the use of the funds and the progress in addressing the crisis. EESA also establishes an Oversight Board so that the Treasury cannot act in an arbitrary manner. It also establishes a special inspector general to protect against waste, fraud and abuse.