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
...
Preferred stock. Good first step.
Is this good? Is this what the Senate will vote on?
Looks good to me. That suspension of capital gains taxes will get knocked out because it undermines the who purpose of Obama and liberalism, though.
Hope it sets up something like the resolution trust corportation.
"Show me just what Mohammed brought that was new, and there you will find things only evil and inhuman, such as his command to spread by the sword the faith he preached." - Manuel II Palelologus
Fine and dandy. But what about the fact the housing market still has a long way to drop. I think it was overvalued since 2003 and needs to go down to those levels.
"Allow a "repatriation window" for profits earned by U.S. firms overseas. Such repatriation amounts would not be taxed if invested in distressed debt"
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.
Pretty Good Idea!!!
I would like to add some resignations to the list of features.
But after two years what then happens to the Capital Gains tax rate?
this sounds like a bad bet to me.
A much better plan, IMHO, and it addresses some of the underlying root causes of the problem.
Didn’t 0bama say today that he is open to other ideas? Well, we shall see if he is as good as his word. Not holing my breath though.
I have a sick feeling that the bill the Senate is voting on will pass the house. I give the odds 80% that it does unfortunately.
pubbies,
showing life?
There’s some very good, creative ideas here. I especially like the repatriation of offshore money.
It is about time! It is ridiculous to even think about a plan that does not address the cause of the problem in the first place.
How misguided. After all Mitch McConnell(R-Idiocracy) said today the adults will get it done./s
Seriously, the House Republicans need to get some high profile financial types like Trump, Wynn,and Gingrich etc. to highlight the pluses.
The Republicans in the Senate, in the name of bi-partisanship, are about to get rolled by Harry Reid and Chuck Schumer and Chris Dodd, and think they have saved the country.
Unfrikkenbelievable.
The dem’s will never allow that one.
Agreed - if this plan is gonna have a snowball’s chance in Al Gore’s futureworld, then the architects had better be selling long and loud on every morning show from Washington to Wasilla.
They really need to kill anything that is drastic, this is a real gut-check here, I fear what they may sign if the stock market goes down, I’m rooting hard for the Dow.
Watch the video at the link, I know you’ll like it.
http://www.freerepublic.com/focus/news/2094322/posts?page=107
>>>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.
Isn’t this the real “danger” for the doomsayers and the Dems? That too much time will pass without a “bailout” bill being passed - without the sky falling - that the rest of us might decide that its not really needed?
That’s why the need for speed in this whole thing is so dire.
If true (about the pork) and McCain does vote for it, then he can go to hell. Make way for Furhrer President Obama.
McConell needs to step aside. NOW
What do you think? (also-maybe should be in breaking?)
Peak of the market was roughly 2005-2006 so, we aren't too far from your 2003 target levels.
CALL!! If there is no suspension of capital gains taxes...then it’s a no go!
>>>Suspend the capital gains tax rate for two years
This might really be something, IF . . . BIG IF . . . it was not done with a “sunset” provision. That is, at the end of the two years, Congress would have to act affirmatively to re-enact the capital gains tax, or to raise the rate back up from a 0% level.
The odds are that once gone, it would be very difficult to replace.
Amen to that!
A tincture of time.............
And money will flow into the market like manna from heaven.
Repealing Humphrey-Hawkins would be welcome indeed.
The Fed is already an enemy of full employment. They don't need any more encouragement.
And where were these Republicans when George Weakdollar Bush wasn't vetoing any bills and letting the dollar drop like a rock?
This looks like it could fly? It looks like it might fly, maybe.
Sounds a whole lot better than the $700B taxpayer rip off and power grab, though, it’s still socialistic. It’d be better to cut the taxes, cut the overreaching regulations, give us incentives to produce and expand, dump the ban on drilling, let Wall Street raise the capital and let the bankers and insurers buy each other out. They can find a way to insure and spread the bad debt risk amongst themselves. Keep government intervention at a minimum. And fire the next idiot congressman who suggests that government should be in the business of controlling CEO compensation. Sheesh!
MUST SEE VIDEO:
Everyone should watch this video.
http://www.cnbc.com/id/15840232?video=873682522&play=1
It will give you the truth about some of what is really in this bill. For instance that Paulson insisted on being able to buy foreign debt by channeling it through a US subsidiary. And that the oversight board has no power.
But you will be surprised by the party affiliation of those speaking. Something is backwards here.
http://www.cnbc.com/id/15840232?video=873682522&play=1
And money will flow into the market like manna from heaven.
Are you sure about that? What about the stock investors who have long-term investments with next to nothing for the cost basis? Doesn't this just give them an out to sell the stocks and remove the funds from the stock market?
No. This is a futile effort, a "sop" to gullible people who think Congress is capable of "working for a free people." Congress's job is to facilitate public indebtedness, so as to obtain a dependent public.
OH...By this bill... I mean the original bail-out bill.
It’s not a bailout silly, it’s a “rescue.” @@
The Senate Bill calls for
- The Senate plan would also raise federal deposit insurance limits to $250,000 from $100,000,
- tax legislation — including a set of popular business tax breaks
- adding legislation to prevent more than 20 million middle-class taxpayers from feeling the bite of the alternative minimum tax
- It included AMT relief, $8 billion in tax relief for those hit by natural disasters in the Midwest, Texas and Louisiana, and some $78 billion in renewable energy incentives and extensions of expiring tax breaks. In a compromise worked out with Republicans, the bill does not pay for the AMT and disaster provisions but does have revenue offsets for part of the energy and extension measures.
why would you invest your profits in distressed debt?
Replace your word 'remove' with 'reallocate' and there you have the genius of the plan. The market, when unfettered by regulation, ALWAYS allocates resources where most needed.
"Revenue offsets" is doubletalk for "taxes."
Certainly worth voting for, as opposed to the lipsticked pig on Monday.
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