Posted on 09/30/2008 6:53:14 PM PDT by maccaca
A group of House Republicans is cobbling together a proposal to stabilize financial markets that can serve as an alternative to the plan proposed by Treasury Secretary Henry Paulson, legislative sources have told CNBC.
The failure of Monday's vote on the $700 billion bailout package—which these Republicans doubt is likely to cause an economic "doomsday" scenario—emboldened the group to press forward with its own plan, sources said.
The group pressing the alternative plan is doing so for largely ideological reasons: They're opposed to the federal government taking a large role in financial markets, sources say.
Components of the alternative plan including the following, according to sources:
Require the Treasury Department to guarantee, at up to 100 percent, bank losses resulting from failed mortgage-backed securities originated prior to the plan's enactment. Such insurance, supporters say, would provide immediate value to the securities and a foundation for which they could then be sold. The Treasury Department would finance that insurance by assessing a premium on outstanding mortgage-backed securities.
Allow companies to carry back losses arising in tax years ending in 2007, 2008, or 2009 back five years, generating a tax refund and immediate capital
Allow a "repatriation window" for profits earned by U.S. firms overseas. Such repatriation amounts would not be taxed if invested in distressed debt (as defined by Treasury) for at least one year.
Allow banks to treat losses on shares of preferred stock in Fannie Mae and Freddie Mac as ordinary losses, not as capital losses
Suspend the capital gains tax rate for two years
Limit backing of high-risk loans by Fannie Mae and Freddie Mac
Schedule Fannie and Freddie for privatization
Suspend "mark-to-market" accounting until the SEC can issue new guidelines that will allow firms to mark these assets to their true economic value
Stabilize the dollar by repealing the Humphrey-Hawkins Full Employment Act, which alternative bailout supporters say diverts the Federal Reserve's attention from long-term price stability to short-term economic growth
...
They showed plenty of life yesterday.
Nice. Now that’s a ‘rescue plan’.
but I thought Lehmann and the rest of them went bust investing in distressed debt
This is the Senate Bill.
And if McCain has any brains, he’ll get behind this too.
Sounds like a big improvement. Hope it passes....with McCain’s name on it.
Can you imagine a Dem controlled House and Senate agreeing with this?
Neither can I.
He probably wouldn't. So then Obama and the Dems can scream that McCain is preventing us from having a solution.
I know...I still like it!!
they noticed that some democrats were voting no
because their districts were very angry about the bailout, so they followed suit.
my pubbie voted yes. she’s not very bright. but she’s pretty.
After two years, not continuing it will be painted as a tax increase in the alt media. :^)
I’d like to add a ban on campaign contributions from any institution that benefits from this.
Why not revoke the tax on SS income while they are at it . It is an example of double taxation anyway !
I am in Tampa. The Market here peaked about 2007 At 100 to 150% of 2003 prices. It was ridiculous.Prices have only come about half back to that. Nobody wants to admit they were stupid to pay that much. The 700b needs to be at least 1.6t to cover. That is just the homes. Then they got 2nd”s and credit cards for tens of thousands and no way to pay.
It becomes a campaign item for the GOP.
There is going to be some give and take on this bill. Not everything in it is going to be to my liking but, as Jefferson found out, that’s why it’s called a Republic.
Media bias? What media bias? [/s]
It becomes a campaign item for the GOP...
...and the cornerstone of VP Palin's Presidential run.
The senate votes tomorrow evening on essentially the same bill with a section on FDIC and the study of suspending the mark program. We all need to call our senators and let them know how we feel about them trying to pass it in the senate.
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