New York (HedgeCo.Net) – Senate leaders will vote today on the $700 billion bailout package, after some key changes were implemented including tax breaks and higher limits for insured bank deposits.
The new limit proposals are something that both candidates and President Bush agree upon, leading some to believe that the bailout package, in its current incarnation, will finally be passed through Congress.
Though the details of the plan are not readily available, lawmakers are hoping that the changes will appeal to those republicans who were knocked the first proposal, while keeping the democrats who are otherwise against generous tax incentives for businesses.
“It has been determined, in our judgment, this is the best thing to move forward,” said Democratic Senator Harry Reid of Nevada.
While the bill has certain new elements to it, including extensions of unemployment along with tax credits for low income home-owners, the basic principle of the government purchasing $700 billion worth of bad debt and eventually re-selling them remains the same. The bill also has some room for new additions, though Christopher Dodd, Chairman of the Senate Banking Committee warns, “Opening this up all over again to other things may doom it.”
Markets tanked following the rejection of the initial proposal on Monday, with the Dow Jones industrial average plummeting 778 points. Though the markets regained some vigor on Tuesday, many lawmakers felt a strong urgency to get a plan passed.
The FDIC currently insures up to $100,000 per account. The new proposal might see an increase in that amount to $250,000.
House Speaker Nancy Pelosi is confident about the new plan, telling President Bush that “Working together, we are confident we will pass a responsible bill in the very near future.”
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