Details on the "Emergency Economic Stabilization Act"
Congressional leaders and the administration announced agreement this evening on the Troubled Asset Relief Program, reborn as the expanded "Emergency Economic Stabilization Act of 2008." House Speaker Nancy Pelosi issued a statement detailing the agreement. Congressional leadership also released a section-by-section analysis of the proposed legislation and the full text of the bill. The American Bankers Association has posted its reactions and resources, including detailed analysis of versions of the proposed legislation.
A vote on the bill could come as early as Monday.
(No) Agreement on "Troubled Asset Relief Program"?
The administration and the Congress reached preliminary agreement on the "Troubled Asset Relief Program," a massive program that would provide up to $700 billion in increments for the U.S. government to purchase and manage portfolios of troubled asset-backed securities from financial institutions. After several days of testimony in the House and the Senate followed by a presidential address, the administration's proposed program changed substantially in negotiations and emerged as an "Agreement on Principles" today. Late in the day talks stalled and the agreement was called into question.
"Agreement on Principles
1. Taxpayer Protection
a. Requires Treasury Secretary to set standards to prevent excessive or inappropriate executive compensation for participating companies
b. To minimize risk to the American taxpayer, requires that any transaction include equity sharing
c. Requires most profits to be used to reduce the national debt
2. Oversight and Transparency
a. Treasury Secretary is prohibited from acting in an arbitrary or capricious manner or in any way that is inconsistent with existing law
b. Establishes strong oversight board with cease and desist authority
c. Requires program transparency and public accountability through regular, detailed reports to Congress disclosing exercise of the Treasury Secretary’s authority
d. Establishes an independent Inspector General to monitor the use of the Treasury Secretary’s authority
e. Requires GAO audits to ensure proper use of funds, appropriate internal controls, and to prevent waste, fraud, and abuse
3. Homeownership Preservation
a. Maximize and coordinate efforts to modify mortgages for homeowners at risk of foreclosure
b. Requires loan modifications for mortgages owned or controlled by the Federal Government
c. Directs a percentage of future profits to the Affordable Housing Fund and the Capital Magnet Fund to meet America’s housing needs
4. Funding Authority
a. Treasury Secretary’s request for $700 billion is authorized, with $250 billion available immediately and an additional $100 billion released upon his or her certification that funds are needed
b. final $350 billion is subject to a Congressional joint resolution of disapproval."
