The House today passed a far-reaching and historic plan to bail out the nation's ailing financial system, CNNMoney reports. The bill passed 263 to 171 after strong lobbying by the White House and party leaders. Last week, the House defeated an earlier version of the bill, shocking the markets and congressional leaders. "We all know that we are in the midst of a financial crisis," House Republican Leader John Boehner said before voting for the bill.
Your Assignment:
Research this "New" bail out bill.
1. What is the difference between the old and this new bill?
2. What are two criticisms of this new bill by opponents?
Due: Sunday 10/5 by 11:59 p.m.
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the change to a bankruptcy law that let judges modify mortgages on primary residence.
reaffirms securities and exchange commisions authorities to suspend the so-called market to market accounting.
pegs the value of assets to their current market place, rahter than the price paid for them.
This new bailout bill would allow the Treasury Secretary to purchase as much a 700 billion dollars in a bid to kick start lending. Increased FDIC deposit insurance coverage and tax break extenders. Old bill was mostly made from tax dollars.
There is still alot of doubt and uncertainty in the bill. Not a lot of people believe that it will do alot of good.
The House adopted the new version after the Senate added about $100billion in new tax breaks to win Republican votes.
1)The New York City Central Labor Council has called a rally of its members to protest what it calls a 'blank check' handed to Wall Street. The CLC argues that it is the high street that in facts needs the help and that the New York City Congressional delegation must act quickly and responsibly to hold those who caused the national financial crisis accountable.
2)If the plan is enacted, its effects will be with us for a generation. For all their recent troubles, America's dynamic and innovative private capital markets have brought the nation unparalleled prosperity. Fundamentally weakening those markets in order to calm short-run disruptions is desperately short-sighted.
The new bail out bill gives the Treasury secretary extraordinary power to buy bad assets from financial companies, boost federal bank insurance and requires the government to modify some mortgages. It also contains a host of controversial tax breaks and some caps on executive pay. The old bill said that The Secretary is authorized to purchase, and to make and fund commitments to purchase, on such terms and conditions as determined by the Secretary, mortgage-related assets from any financial institution having its headquarters in the United States. Although this plan went through there are still some arguments over it. Mr. Bernanke said taxpayers would still be reasonably safe as the government would pay less than the cash flow value of the securities. In effect, he argued that there could be a win-win solution for both taxpayers and banks. Mr. Paulson said the plan would “avoid a series of financial institution failures and frozen credit markets that threaten American families’ financial well-being, the viability of businesses both small and large and the very health of our economy”.
this bail out plan is for 7oo billion dollars and sent wall street shares soaring.
some people made up their mind that the bail out bill is also that the government can spend billions of dollars. many people beleiv that this plan is nothing more than a mere bribery.
1.) The bills are worth the same price but the new bailout bill has some more modifications. It gives extending bank deposit insurance and Helps with expired tax breaks.
2.) Some politicians think that the bill is a necessary evil, and some are skeptic on whether or not the new measures on the bailout bill will help any too.
The new Bailout Bill--the "Dodd Amendment"--is essentially the same as the old one, except with the following provisions:
Raising FDIC-insurance limit to $250,000
Tax breaks for businesses and alternative energy
and people think that the government should get themselves out of there problem not using the people they help
1)The second bill is longer.The first bill has no over seeing, but the second bill has the Congress over seeing.The second bill limits on executive compinsation.2)It will increase the budget deficit.Changing the rules will bury the problem that are hiding beneath the surface which could cause problems with investor confidence.
QU.1:
The bill allows the FDIC to borrow from the Treasury to cover any losses that might occur as a result of the higher insurance limit.
The bill also adds in three key elements designed to attract House Republican votes - particularly popular tax measures that have garnered bipartisan support.
It would extend a number of renewable energy tax breaks for individuals and businesses, including a deduction for the purchase of solar panels.
The Senate bill would also continue a host of other expiring tax breaks. Among them: the research and development credit for businesses and the credit that allows individuals to deduct state and local sales taxes on their federal returns.
In addition, the bill includes relief for another year from the Alternative Minimum Tax, without which millions of Americans would have to pay the so-called "income tax for the wealthy."
Qu 2:
Opponents of the bill have said they resented being given a "my way or the highway" choice to address what they acknowledge is a very serious economic threat.
The tax provisions of the Senate bill - the bulk of which come from the addition of tax breaks from other legislation - may reduce federal tax revenue by $110 billion over 10 years, according to estimates from the Joint Committee on Taxation. More than half of that is due to the 1-year extension of AMT relief.
The original bill was criticised for helping the needs of Wall Street bankers at the expense of ordinary citizens.
The new version offeres more protection for individual investors and small businesses.
Since the House rejected the bill, politicians have added new things such as tax breaks for small businesses and an increase in the amount of savings the state will guarantee - from $100,000 to $250,000.
Some critics say that it is only a short time fix and that the economy will go back to its old self in a matter of time.Also some say that it is just going to add to the credit crisis the United States is already in.
The new bailout plan is the shore up banks rattle by the meltdown of the house marketing and clenched up cridets markets would raises the fedural debt to an all high of more then 11 trillion dollars.The old bailout plan was the fedural debt is 700 billion dollars.Obamas opinion on the bailout is that he will support the bailout. McCains opinion is that " This is something that all of us will sallow hard and go foward with."
The whole purpose of the bailout is to free up credit so people will spend money and that will help create jobs and people will be able to keep there homes. The new bailout is better then the old bailout because it gives better tax rates for the middle class and will provide more protection for American people. The old bailout didnt allow tax breaks as the new one for the middle class.
Changes the Senate made include the addition of a host of tax break extensions and some new provisions intended to help individuals and businesses.
Many economists, however, say the president and other supporters of the bailout were painting too rosy a picture.
Until the tidal wave of foreclosures ends and home values stop their stomach-churning drops, banks will remain reluctant to lend and the economy won't improve, experts said.
Top lawmakers were optimistic Friday that the House of Representatives would shortly pass a revised 700-billion-dollar Wall Street bailout, after igniting market turmoil by rejecting an earlier version.
Republican Party leaders emerged from a meeting of their caucus saying that they hoped the bill would pass, but still declined to give a cast-iron assurance they had the required numbers.
"I am optimistic about today," said Republican House Minority leader John Boehner, who Democrats accused of failing to get his party into line behind the bailout when the chamber sensationally rejected the bailout on Monday.
"We are not taking anything for granted, we will continue to talk to our members."
House Minority whip Roy Blunt said that the pain of the deepening credit squeeze was now being felt by the public, altering political perceptions of what had been a highly unpopular bill .
"Calls to members officers are beginning to even out, people are beginning to realise this has impacts on their pension plans."
Rahm Emanuel, a senior member of the House Democratic leadership spoke out in support the bill from the House floor, trying to win over wavering members of his party by promising more help for vulnerable Americans.
"This is only the first step. While we address the balance sheets of banks, the next step must now address the checkbooks for middle class families and the struggles that they face," he said.
The Senate passed a revised version of the bailout package 74-25 on Wednesday, including sweetners on extending bank deposit insurance and expired tax breaks in order to get more Republicans behind the legislation.
Only 85 Republicans voted for the bailout in the 228 to 205 defeat for the bailout on Monday, and Democratic House leaders say they need 100 members of the minority party to ensure passage.
There were also signs that some Democratic members of Congress might be wavering in their 'no' vote against the bailout, as the party leadership rolled out an intense whipping operation.
Many lawmakers Friday voiced deep skepticism whether the new measure would work, while bleakly concluding that the bill was a necessary evil.
"There's a song the day the music died. I don't think it is too much of a stretch to say this may be the day America died," Republican Virginia Foxx said Friday.
"I'm not alone in feeling that what the Congress is about to do today is a very, very serious consequential thing for this country."
1.) The new bailout bill allows 700 billion dollars to be taken and the old one is based on taxed dollars.
2.) Some politicians disagree with the new bailout bill and others are skeptical if they like it or not.
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