Intense negotiations that, at times, became loud and angry produced a compromise on a $700 billion plan to rescue the nation’s financial sector.
"It’s not exactly the bill we would have drafted certainly," declared southwest Missouri Congressman Roy Blunt, "but it’s a long way from where it was just a few days ago."
House Republicans who raised objections to the initial plan submitted by the Bush Administration by Treasury Secretary Henry Paulson sent Blunt into the negotiations Friday. An earlier meeting at the White House reportedly devolved into a shouting match with Democrats accusing Republicans of upsetting the delicate balance of negotiations. Republicans criticized Democrats for keeping them out of negotiations.
The plan is intended to shore up the nation’s financial sector, rocked by bank failures that have nearly frozen the credit markets. Normal lending transactions have been held up. Even strong financial institutions have become skittish.
Blunt says the bill has been improved, because it contains substantially more taxpayer protections.
"I think you can much more adequately describe this bill now, because of the elements that have been put into it, as a work out of the problem, rather than a bail out of the problem," Blunt told reporters Sunday.
The House plans to vote today on the package that House Speaker Nancy Pelosi declared "frozen", meaning that House leadership will not allow the negotiated deal to be changed during floor debate. Once approved by Congress and signed by President Bush, $250 billion would be made available immediately. Congress would be consulted before the remainder would be released. The money will be used to remove troubled assets from the books of financial institutions, mostly mortgage-back securities that have lost considerable value with the collapse of the housing market.
Democrats won concessions on executive pay, eliminating the possibility of executives leaving companies that participate with so-called golden parachutes. Republicans won concessions that they claim will lessen the burden on taxpayers and force Wall Street to share in the cost of recovery, such as issuing warrants that would allow any windfall coming to companies to be shared with the government. A parallel insurance program would also be created.
The compromise has the backing of President Bush, who acknowledged it presents lawmakers with "a difficult vote" just a month outside the November elections. The Senate could vote on the package as soon as Wednesday.