Dodd Bailout Bill More Aggressive Than Treasury Plan, Forgoes "Blank Check"

Politico:

Banking Committee Chairman Christopher Dodd is taking much more aggressive approach to the Treasury bailout plan, demanding foreclosure assistance, limits on executive compensation and profit sharing for taxpayers if the Treasury begins to make money back on the bad debt it plans to purchase.

Dodd's legislation, obtained this morning by Politico, has just started to circulate among Senate legislative directors. His plan addresses many of the concerns raised by Democrats and Republicans who are concerned about handing over $700 billion blank check to Treasury Secretary Henry Paulson.

While the Treasury would receive much of the authority that it wants to buy up distressed assets, Dodd's add-ons have many of the populist ideas that will appeal to skeptical Democrats. His plan is also broader than the one unveiled by House Financial Services Chairman Barney Frank (D-Mass.), so there will be significant negotiations in the days ahead between the House and Senate if Congress is to pass a bill by the end of the week.

Read the whole story: Politico

Comments

[tktvr2]

I have heard a rumor that people are going to gather at the district offices of all 435 of our representatives, from 6 to 7 pm local time on Thursday evening Sept. 25.
I heard that the people are going to demand that we get an explanation of how we got into this mess.
I also heard that a two page history of how we got into this toxic economic state was going to be distributed at these gatherings.
Has anyone else heard about this?
Are people just going to show up, and hope for some explanation?
Can I find this two page history someplace on the internet?
Is Wall Street morally bankrupt?

[brodiesgirl]

Dodd and Obama get money from Fannie Mae employees and Rick Davies lobbies for Fannie Mae and the wheels on the bus go round and round - There's plenty of blame to go around and not enough plans for the future. Doesn't this remind anyone of the late 80's early 90's- SNL failures, corruption - huge deficit - housing crisis. Why can't our government learn?????


Oh yeah, we keep electing the same people over and over again - Can you say term limits?!?!

[research]

You GOP had absolute control of government for 6 years and complete veto power since then.

You are a liar,

This is all the GOP's fault.

[PADebbie]

Term Limits YES! We keep electing the same people expecting a different result!

[Guynemer]

Now the guy who has received more funding from Fannie and Freddie than any single politician (slightly more than Obama) and this @sshat somehow thinks he has something to add to the equation?

Great.

[imusintheevening]

Here is a simple solution:

The Government agrees to lend these Banks all the money they want:

AT THE SAME MAXIMUM INTEREST RATE CHARGED TO THEIR CREDIT CARD CUSTOMERS.

[mabinog]

I get where you coming from, but the government is going to be buying bad debt from these incompetents and doing what with it I don't know.

[imusintheevening]

Right, it is as they called it "Trash for Cash", but my rationale is that the hang up will be how to bail out the "former" Investment banks and do something for the mortgage holders.

So, if the banks can borrow at the interest rate which is they maximum at which they lend, they will quickly eliminate the "spread" and lend at say 4%, then anyone in debt like a mortgage holder can borrow at that 4% and pay down their higher interest debt and that bank essentially just loses the difference in the rates which was usurious in the first place.

I suppose it is to sensibly simplistic to work, but I think our Congressional Representatives should take the opportunity to limit the high interest rates that banks can charge as an incentive to pass this idiotic bailout.

[SShaw490]

Good for Chris Dodd. And, for that matter:

If you just said "No" to Paulson and decided to put that 700 billion dollars into America instead of putting it into a rescue package for investment banks, what could you do with it?

How much would it cost to put together a Manhattan Project to build the best plug in hybrid electric car in the world? One that Europe and Japan would love to buy?

How much would it cost to fund the biggest public transportation project in history, with high speed rail lines between central business centers and suburbs all over America?

How much would it cost to develop the world's finest broadband system that would allow video linking of millions of people who work all over the country, and thus make satellite offices the NORMAL way for people to work rather than commuting like lemmings every damn day?

How much would it cost to convert a couple of million cars to natural gas?

How much would it cost to build a natural gas pipeline in Alaska?

How much would it cost to provide a college education to any student who could score more than X on the SATs? And a substantial stipend for any other student who could manage to avoid flunking out?

How much would we have to invest in medical research to find a cure for cancer?

How much would we have to invest to make sure every American has access to affordable health care insurance?

[GOP4MoreTears]

We are not going to have a melt-down in our system if we take the time to think this through. Take a chill pill Congress.

[collprof]

There can never be blank check authority given to any member of Bush's staff. A blank check for war was given to Bush to as a result of an emotionally heartsick country after 9/11 and it led to Gitmo, warrantless wiretapping, rendition, a unilateral invasion of another country, 4200 dead soldiers, and billions, if not trillions, spent on the waste of Iraq while at home Bush gave away America to investment bankers, lobbyists who are straddling every American with ever more debt.

[AlieNation]

It is hard to tell exactly what this so called “bailout” package looks like but whatever it is it should include the following:


1. The U.S. will buy up mortgages, at a discounted rate, based on current fair market value of the underlying property, which in most cases will be 25 percent or more below the original closing price.

2. The U.S. will not pay back any interest or penalties that have accrued as a result of the mortgage default.

3. The U.S. or its agencies will exercise all ownership rights over purchased mortgages.

4. The original home purchasers, who qualify, will be offered first right of refusal to repurchase a new mortgages at the current property value and at a significantly lower interest rate.

5. Companies which have sold mortgages to the U.S. must drop all claims of debt against the original mortgages holder.

[GOP4MoreTears]

Senator Dodd has bought into the Republican narrative that there must be a rush to judgement, He is sadly mistaken, there is no need to rush and strap this albatross around a new President's neck.

[MIMom]

OK - everyone settle down. Rethug are blaming Dems, Dems blaming Rethugs.

Guess what? WHO CARES?

We are in the mess now and it needs to get fixed. Period.

I don't want to hand Bushie a blank check, and I don't want "slush" funds or whatever either.

So, tell me, WHO HAS THE SOLUTION? Anyone?

Hmmm....That's what I thought. Rethugs can spew it, can back it up.

[UnbiasView]

Politics is about blame in case you hadn't noticed . . . if was about solutions then there wouldn't be a D or R it would be about the job you do and success you have.

[MIMom]

Good point.

However, I am frustrated with this whole process.

[MIMom]

CAN'T back it up - excuse me.

[GOP4MoreTears]

One thing ya don't have to worry about is Republicans coming up with any solutions, especially as they're the problem.

[GrainOSand]

Restructure the loans in distress. Look closely to determine how to penalize executive pay for non-performance, and to bring it in line with a desire to be fair in a society claiming to be fair. When a CEO earns sixty times what a rookie police officer (or teacher, firefighter,…) does, something is wrong because if that rookie cop does not do his or her job all bets are off for the CEO, even with private security. I also heard a suggestion that the credit scores of all Americans should get a 40-point bump. I say no to that! Make it everyone has A-1 credit starting now and let loans be given based on earning potential, assets held, and cash on hand -- you know the old fashioned way. I have watched the credit score become something selectively used in societal decision making, to it becoming a ubiquitous method to deny or to grant. Jobs and the ability to be insured are now based on your credit score. Life by the actuary tables is not real life but greedy life or life by executive briefing and not human concern. None of that actuarial hand wringing avoided this crisis so obviously calculations of what the future holds remain an inexact science. I understand the need to calculate risk but who is calculating the risk of trusting those calculating the risk. Go slow congress. History is riding on due-diligence and common sense and fearful of blunder.

[UnbiasView]

"When a CEO earns sixty times what a rookie police officer (or teacher, firefighter) does, something is wrong because if that rookie cop does not do his or her job all bets are off for the CEO, even with private security"

Why is there something wrong with that? Supply and demand . . . if there are 1 million people that can be a cop and 1 person that can be Bill Gates why should they make more money?

[GrainOSand]

I have no problem with Bill Gates' fortune because from all reports he realizes with great wealth comes great responsibility as does Warren Buffet -- again, by what is reported. I am speaking to the concept of valuation. Some say it is whatever the market will bear in terms of how much something is worth. I say, keep thinking that and eventually that theory will unravel as well. The market is prone to manipulation as it relates to value. Morality and principle are prone to unravel as it relates to manipulating value to promote ones’ own value. Masses of people can get hurt when value has been manipulated to the degree that an unfair balance has been struck where a small few has the greatest spigot or the deepest well. Employment of thousands while non-commercial Linux is free and licensing fees for Microsoft products skyrocket. Proper valuation and revolutions in education will lead us down a different path, for now our priorities seem out of whack. The free market yes, but absent greed, corruption, and slant to favor this one over that one; how do they say it -- an unfair competitive advantage?

As for the cops, a bullet can change their life situation in a hurry, where a bad release of software barely impacts Bill Gates' existence.

[modestlacey]

I think the misuse of the credit scoring system is to blame for everything that is now happening. I have been saying this for months. My friend, who follows the news, said she hadn't even seen this mentioned. I had to Google "bailout bill credit scores" because I couldn't believe that. This is the only relevant result I found. Three for-profit credit bureaus and FICO have created a scoring system that is neither valid nor reliable. Credit scores have been influenced heavily by unpaid medical bills and bankruptcies because of them. In addition, American citizens are uneducated about credit scores and their effects. I feel that the use of credit scores to determine auto insurance rates and being hired for a job is completely ridiculous and in violation of everyone's rights. For instance, should someone with a perfect driving record who has a low credit score due to unpaid medical bills pay the same rate as someone with a horrible driving record? Should someone who's child had cancer and had to file bankruptcy pay a mortgage payment that is twice as high as someone who has a "good" credit score, even if they've never paid any other bills late? The credit scoring system makes it impossible for people who have had problems to get ahead because based on their score, their interest rate is 20% instead of 7%. Greedy banks took advantage of a flawed system to gouge consumers and now they want help. I find that hilarious.

[westportmike]

Pelosi is a wimp, her time is over!! In the words of Amy Pohler, she needs to grow a pair!

[LiberalDemIda]

I like Nancy Pelosi but I have to agree with you here, westportmike.

Obama/Biden '08/'12 = the SMART People's Choice!

[UnbiasView]

1% of smart people like Nanacy Pelosi . . . 99% of stupid people like her.

[westportmike]

There was a time i respected her too.

[Realist]

Last time I saw Dodd he was on TV telling we the people there was no reason to sell Freddie and Fannie stock. The following week shareholders got wiped out! Dodd is a penny stock pusher - clearly not the guy to be talking about next steps when he was blind to the freight train. VOTE ALL INCUMBENTS OUT - 20 AND 30 YEAR SENATORS ARE LOSERS. PERIOD

[UnbiasView]

Joe Biden? Ted Kennedy?

[kimmie69]

losers

[SShaw490]

How 'bout a 26 year Senator named McCain? Like a 72 year old man who has never gotten a paycheck in his life from anyone other than the government?

[CharlotteNH]

You go, Chris Dodd.

I don't know the details of your plan but I hope it includes:

- accountability for those who pillaged their firms (including financial pay backs)
- limits on executive salary and bonuses paid going forward (X% of net revenues)
- regulations passed before this goes forward (even if miminal initially)

Where I don't agree is leaving most of the authority to the Treasury. Hank Paulson instills no confidence in me. Even if I were confident in his abilities, the future of this country should never be put in the hands of one man or one government agency.

[UnbiasView]

Mabye include something on getting rid of the bad regulations as well . . . like forcing banks to give home loans to people with bad credit . . .

[LiberalDemIda]

BiasedView, it was beCAUSE of DEregulation by your beloved party that banks overstepped their bounds and pushed loans on borrowers they couldn't afford, so stop blaming the poor man for being hungry, and hold the powerful and affluent responsible for dangling steak in front of their noses.

This fiasco is because of deregulation of government oversight and banks' bad business practices, a'right?

Jeez... what a t00l.

Obama/Biden '08/'12 = the SMART People's Choice!

[GOP4MoreTears]

Senator Dodd is a (D) the plan you're speaking to is what the Republicans have been doing, which got us into this mess in the first place.

[viflyer]

Dodd's plan is certainly going in the right direction. Pelosi and Reed ARE spineless. ANYTHING that they percieve might hurt their chances for re-election is thrown under the bus. I can imagine that right now Pelosi is terrified that if they don't give Bush and Paulson just want they want YESTERDAY. and the economy crashes, the Dems will be blamed. Man we have to get rid of Pelosi , pretty boy Steney, and Reed.

Things have to change in this country. Corporations can no longer run the show. They are KILLING us!!!

PUBLIC FINANCING NOW!!!!!