Senate adds sweeteners to bitter bailout pill
The underlying legislation would:
* Authorize $700 billion for the government to purchase troubled assets and buy equity in distressed financial firms.
* Require the Treasury Department to make rules to prevent excessive compensation for executives whose companies benefit from the rescue, and cap deductibility of executives’ pay packages at $500,000 for firms that get $300 million or more from the program.
* Establish an oversight board for the program, a special investigator general to monitor it and regular government audits.
* Require that the president establish a plan to recoup the cost from the financial industry if, after five years, there are any losses.
* Phase in the money for buying troubled assets, with $250 billion available immediately, $100 billion to be released if the president certifies it is needed, and the last $350 billion available with another certification, but subject to a congressional vote.
Among the sweeteners added are those that would:
* Provide business tax breaks, including for production of, investment in, and use of renewable fuels.
* Require group health plans that include mental health or addiction treatment to provide coverage for those conditions that is equitable to other medical coverage.
* Increase personal credits against the AMT, shielding more than 20 million taxpayers from the tax.
* Grant tax relief to victims of natural disasters in the Midwest and elsewhere.
* Extend through 2011 a program that funds rural schools and local governments that have low property-tax bases because they lie within or are adjacent to federal lands.
* Extend until end of 2009 the deduction for state and local general sales taxes.
* Extend until end of 2009 individual tax breaks, including deductions for higher education costs and teachers’ personal expenses.
Increase, from $100,000 to $250,000, the limit on federal bank deposit insurance.
Story tags »
• Taxes • SenateOnce 3 pages, bailout bill now length of novel
Two Saturdays ago, it totaled just three pages — the White House’s request for $700 billion to rescue tottering financial institutions by buying their devalued mortgage-related assets.
After an intense weekend of negotiations, the draft of the bailout legislation before Congress had swelled to 42 pages.
The following Friday, after almost a week of marathon talks between Treasury Secretary Henry Paulson and key lawmakers in both parties, the working version was up to 102 pages. It went down to defeat Monday in the House, mostly at the hands of Republicans.
Once the Senate was finished adding sweeteners today to entice reluctant House Republicans to change their minds and vote for the bailout, the bill heading for passage had grown to 451 pages.
It was unclear whether it would expand still more as House leaders hunted for the votes needed to clear the bill.
(
