Tentative accord reached on bailing out bankers

(Compiler's note: We the American people -- those paying for this social re-engineering failure -- had better read very carefully what it ultimately written down. Some of the same people who set up this failure are now trying to "fix it." And I for one would not trust them to run a shoe shine business let alone this newly proposed wall street operation that has global impact. You can be sure that the "devil will be in the details." Since we will be paying for their mess, the politicians can be sure that this time we will be watching and speaking with our votes.)

The Seattle Times - Sunday, September 28, 2008

Congressional negotiators and the Bush administration's top Treasury officials go to work Sunday on settling the final details of a historic $700 billion Wall Street bailout aimed at keeping credit flowing and saving the nation's shaky economy from collapsing into a crippling recession.

"We've made great progress. We have to get it committed to paper so that we can formally agree," House Speaker Nancy Pelosi, D-Calif., told reporters in announcing the tentative deal shortly after midnight Sunday.

Congressional leaders hope to have a House vote on the measure Monday, with a vote in the Senate coming later.

All sides expressed optimism and Senate Majority Leader Harry Reid, D-Nev., said he expected an announcement soon.

"We've still got more to do to finalize it, but I think we're there," said Treasury Secretary Henry Paulson, who participated in the negotiations in the Capitol.

"We worked out everything," said Sen. Judd Gregg, R-N.H., the chief Senate Republican in the talks.

Under the plan, the federal government would purchase mortgage-backed securities and other bad debts held by banks and other investors. The money should help troubled lenders make new loans and keep credit lines open. The government would later try to sell the discounted loan packages at the best possible price.

At the insistence of House Republicans, some of the program's $700 billion would be devoted to a program that would encourage holders of distressed mortgage-backed securities to keep them and buy government insurance to cover defaults.

The legislation would place "reasonable" limits on severance packages for executives of companies that benefit from the rescue plan, said a senior administration official who was authorized to speak only on background.

It also calls for the financial sector to help make up the difference if the government does not recoup its investment in five years, the official said, but details remained unclear.

Also, the government would receive stock warrants in return for the bailout relief, giving taxpayers a chance to share in financial companies' future profits.

To help struggling homeowners, the plan would require the government to try renegotiating the bad mortgages it acquires with the aim of lowering borrowers' monthly payments so they can keep their homes.

Despite the changes made during an intense week of negotiations, the heart of the program remains President Bush's original idea: spend billions of taxpayer dollars to buy mortgage-backed securities whose value has plummeted.

The White House said it was pleased with the progress made on the bill.

Also read Deal reached on financial markets bailout