Near-Agreement on $700B Bailout is Stalled, According to Lawmakers
After several days of high-level lobbying for emergency legislation allowing the federal government to spend some $700 billion to shore up the nation’s struggling economy, an agreement reportedly was reached among key lawmakers about a proposed plan after a several-hour meeting at the Capitol this morning.
However, it still may not be the final answer, since some details haven’t yet been worked out, and the U.S. Treasury Department and other Congressional caucuses haven’t yet agreed to it, according to ABC News.
And, at the end of the day, a deal on the bailout plan still hadn’t been finalized, reports the Los Angeles Times. The New York Times says it is now stalled, at least for the moment.
Sen. Christopher Dodd, D-Conn., “looking tired and annoyed,” complained after a White House meeting late today that partisan “political theater” was slowing down a bailout plan that earlier in the day seemed more certain, according to the New York Times.
A news alert this afternoon on Reuters reported that House Minority Leader John Boehner, R-Ohio, said his members haven’t agreed to the bailout plan, and an Associated Press said he is “huddling” with Republican presidential nominee John McCain on the issue.
Nonetheless, Dodd said after the Capitol meeting that a “fundamental agreement on a set of principles” has been achieved among a bipartisan group of nine Congressional leaders, ABC News writes. And Sen. Bob Bennett, R-Utah, agreed, according to AP: “I now expect that we will indeed have a plan that can pass the House, pass the Senate [and] be signed by the president,” he told the news agency.
Dodd, who chairs the Senate Banking Committee, said today that he expects the bailout legislation to be passed within a few days, according to the London Times.
The bailout proposal they have approved now provides for an oversight board, rather than simply empowering the secretary of the Treasury Department to oversee much or all of the expenditures, as well as a cap on compensation for executives of corporations whose debt instruments will be purchased and “protection for taxpayers,” ABC explains.
As discussed in earlier ABAJournal.com posts, Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke have been predicting dire results for the U.S. economy if the bailout legislation isn’t quickly enacted.
The apparent agreement between Dodd and other Congressional leaders “could require all companies participating in the program to agree to limits on executive pay—such as restrictions on ‘golden parachutes,’ ” reports the Wall Street Journal (sub. req.). “It is also likely to give the government equity warrants in all participating companies.”
Still reportedly unresolved, though, is whether to amend bankruptcy law to give judges the power to reduce the principal balances of mortgages, to bring them into line with the actual fair-market value of the real estate. Bush administration officials oppose doing so, and there is disagreement among lawmakers on the issue.
Dodd and other key lawmakers reportedly met this afternoon with President George W. Bush and the two presidential candidates to discuss the bailout plan.
Among those who attended was Sen. Richard Shelby of Alabama, the ranking Republican on the Senate Banking Committee, according to the L.A. Times.
However, he was “noticeably absent at the Thursday morning meeting in the Capitol,” the WSJ notes. “Mr. Shelby has said he opposes the idea of bailing out Wall Street and was replaced in negotiations by Mr. Bennett, the number two GOP senator on the Banking panel.”
Additional coverage:
New York Times: “Lawmakers Agree on Outline of Bailout”
Washington Post: “GOP, Democratic Negotiators Reach Agreement in Principle”
ABAJournal.com: “US Financial Crisis Sparks Harsh Criticism of Regulatory Efforts”
