To log on to the entire new proposed Bill that now goes before the House Go to https://www.namb.org/images/namb/GovernmentAffairs/Senate%20Bill.pdf
Good evening! The $700 billion bailout plan passed the Senate this evening with a few changes from the original bill earlier this week. The House is expected to vote this Friday. This bill has received a bit of bad publicity as many Americans feel that taxpayer’s money will be used to bail out borrowers who made bad financial decisions. The truth is that the funds are aimed at keeping major financial institutes’ heads above water so that Americans can continue to use credit not only to buy homes, but to purchase cars and open credit cards. The bills main objective is to purchase assets from troubled financial institutes and free up money for banks to have the ability to continue lending money.
Fundamental Facts about the Bill
- Of the $700 billion only $250 billion will be immediately available, the rest will be released in stages
- The Treasury will set up an insurance fund to guarantee companies’ troubled assets and mortgage-backed securities purchased prior to March 14th of this year
- Stipulations will be placed on bonuses and incentives of Senior Executives of troubled companies to ensure that numbers are being reported correctly
- Two oversight committees will be formed to continue close monitoring
Differences from the Original Bill
- The FDIC insurance cap will be raised from $100,000 to $250,000
- The FDIC may borrow funds from the Treasury to cover losses resulting from the new insurance cap
- Tax breaks will be offered to businesses and individuals for using renewable energy
- Research and development tax breaks will be given to many businesses
- Individuals will be able to deduct state and local taxes on their tax returns
- The Alternative Minimum Tax program will continue for another year
The Hot Potato is Passed to the House
There is a mixture of speculation about whether the bill will pass the House vote on Friday or not. Some say that they feel the changes will attract more House Republicans while others argue that the tax breaks may actually loose Democratic votes. We will just have to play the wait and see game again through the rest of the week.
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