The Home Front

Outline of the Bailout Bill

By Luke Mullins

Posted: September 29, 2008

Here is a summary of the financial bailout bill that the House of Representatives rejected today.

From the House Financial Services Committee:

SUMMARY OF THE "EMERGENCY ECONOMIC STABILIZATION ACT OF 2008"

I. Stabilizing the Economy

The Emergency Economic Stabilization Act of 2008 (EESA) provides up to $700 billion to the Secretary of the Treasury to buy mortgages and other assets that are clogging the balance sheets of financial institutions and making it difficult for working families, small businesses, and other companies to access credit, which is vital to a strong and stable economy. EESA also establishes a program that would allow companies to insure their troubled assets.

II. Homeownership Preservation

EESA requires the Treasury to modify troubled loans—many the result of predatory lending practices—wherever possible to help American families keep their homes. It also directs other federal agencies to modify loans that they own or control. Finally, it improves the HOPE for Homeowners program by expanding eligibility and increasing the tools available to the Department of Housing and Urban Development to help more families keep their homes.

III. Taxpayer Protection

Taxpayers should not be expected to pay for Wall Street's mistakes. The legislation requires companies that sell some of their bad assets to the government to provide warrants so that taxpayers will benefit from any future growth these companies may experience as a result of participation in this program. The legislation also requires the President to submit legislation that would cover any losses to taxpayers resulting from this program from financial institutions.

IV. No Windfalls for Executives

Executives who made bad decisions should not be allowed to dump their bad assets on the government, and then walk away with millions of dollars in bonuses. In order to participate in this program, companies will lose certain tax benefits and, in some cases, must limit executive pay. In addition, the bill limits "golden parachutes" and requires that unearned bonuses be returned.

V. Strong Oversight

Rather than giving the Treasury all the funds at once, the legislation gives the Treasury $250 billion immediately, then requires the President to certify that additional funds are needed ($100 billion, then $350 billion subject to Congressional disapproval). The Treasury must report on the use of the funds and the progress in addressing the crisis. EESA also establishes an Oversight Board so that the Treasury cannot act in an arbitrary manner. It also establishes a special inspector general to protect against waste, fraud and abuse.

TREASON-when are we going to see military arrests of Paulson and the other financial executives.

Article I, Section 9, subsection 7 of the U.S. Constitution requires that the Department of Treasury only draw money from the Treasury as a consequence of appropriations law, and make regular accounting of its use. Paulson's initial demand violated this, even if Congress did not fully allow him to get away with it. Artile III, Section 3, Subsection 1 defines treason as "levying war against these United States." Following up on that with Black's Law definitions of levying war, mixed war, force (war), the Financial executives of the U.S. did indeed get together to engage in acts that threatened the lives and security of this nation, and they pressured Congress to act on fear of their acts of further destruction of the financial security--and military security that is all dependent upon financial security--of this county. In June, 2007, none other than the U.S. Supreme Court declared in its decision against Mr. Billing et al for attempted use of the civil courts to bring them to justice, that the financial companies' executives and numerous top managers and other employees did indeed act together in conspiracy to defraud and steal massive amounts of money from the citizens of the U.S., risking the livelihood, homes, and very lives of the citizens, as to merit the description racketeers but could not be pursued in civil courts or otherwise under the RICO act because Congress had exempted the industry from such prosecution. It declared that only the SEC had regulatory, investigative and prosecutory authority. The SEC has not acted to use any of it, since Senator Cox became Chairman. It is well documented that people can lose their lives from homelessness, lack of food, and lack of health care all dependent upon money, such as the nearly $6 trillion, and now another trillion dollars stolen from the U.S. citizens as investor-savers, and taxpayers. Our very defense also depends upon these funds, and now the military itself must compete with the greedy thieves who head our financial conglomerates and investment banks--lead by the Secretary of Treasury, a former CEO of the very company that organized and led the racket. It is time for the military to remember its SWORN obligation to uphold the Constitution of these United States and arrest the executives, former executives, and the current Secretary of the United States for Treason and try them, and if found guilty, shoot them in the normal manner prescribed for punishing this highest of crimes. As a citizen of the United States, and one who has been seriously harmed, even now enduring threats to life itself by these institutions, I call upon the military of MY country to remember its patriotic duty to the Constitution--and the people for which it stands--and its own needs--and arrest these traitors and try them--and remove this threat from our Congress and our people.

Cecilia L. Fabos-Becker, San Jose, CA

Cecilia L. Fabos-Becker of CA @ Oct 03, 2008 16:31:23 PM

Wall Street Scare

SCARE: Looks like Henny Penny is at it again saying,"The Sky is Falling, The Sky is Falling." I say, let the sky fall on their heads. Besides it's only a couple of America's financial institutions that have corrupt, greedy CEO's running them. The banks failed because of their bad "get rich quick" investment schemes.

CREDIT: I have a credit card, but I really don't need it, because I pay it in full every time the bill comes. I own my home outright. I own both my cars. "You arrogant SOB", you might say. Well, my two cars are 14 and 11 years old. My home is 24 years old. My wife and I live on a small pension & Social Security (less than $2,000 a month). Besides that, we are raising a granddaughter. We have learned to live within our means and not above our means. We believe that credit is a privelege and should not be abused. It would behoove the middle-class workers who had their mortgages forclosed. Those who think they should own million dollar homes, drive Porche's and eat steak twice a day, but can't pay their mortages or credit card bills. So, if the sky is falling for them, then let them learn what it's like to live within their means and return to the real world. These are the homeowners Bush said we would not bail out, because their optomistic greed fell back in their faces. With a bailout, they will still get to own their million dollar homes and pay a minimum mortgage payment. As a taxpayer, I don't feel like helping the greedy so & so's. Let the sky fall on them.

Tom Hays of FL @ Sep 30, 2008 14:14:52 PM

Where's the beef?

If this was all the bill was,why didn't it pass?. This looks like a very good,doable plan, what is missing? Why was it voted down????

JJ of OK @ Sep 30, 2008 13:44:15 PM

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The Home Front

The Home Front

Associate Editor Luke Mullins tracks the treacherous housing market and explains how to unload a five-bedroom McMansion or even find that dream home.

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