New York (HedgeCo.Net) – The $700 billion rescue plan proposed by the Treasury and backed by President Bush seems to be greeted with disdain by republicans and democrats alike. After excruciatingly long hearings and even an emergency meeting with the two presidential candidates, an agreement was still not reached as to how the rescue will play out.
“There will ultimately be $700 billion available, but how soon and with what other steps, are still being debated,” House Financial Services Committee Chairman Barney Frank told reporters.
Some issues that lawmakers are trying to come to terms on include executive compensation, foreclosures, accountability, regulation, and how taxpayers can be provided equity stakes in the companies whose rescues they would be helping to fund.
Some republicans are pushing for financial institutions to purchase insurance on mortgage-backed securities, while the Treasury is opting for a plan where the government would instead purchase the bad debt.
"I don’t believe this Paulson plan will solve the problems, it might exacerbate them,” said Richard Shelby, a Republican member of the Senate Banking Committee.
Experts agree that unless the majority of the party hops on board with the president, it’s unlikely this will be passed through congress.
“Ms. [Nancy] Pelosi will not bring a partisan bill to the floor,” Frank said. “If the House Republicans continue to reject the president’s approach then there is no bill.”
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