The San Francisco Chronicle did a good summary of Senate-added provisions to the rescue bill (excerpted below) to make it more palatable to constituents. Some in the House may consider this pork, but this is at least how it passed the Senate for now. If the House didn’t pass it, a revised bill would go back to the Senate for another vote. Also, the Chronicle did a graph (shown here) outlining total 2007 government expenditures, and pointing out that “The $700 billion plan now before Congress would cost more than the $628.4 billion that was paid out last year under Social Security, but less than $782.8 billion spent on all retirement and disability programs – after benefits for government retirees and veterans were added.”
Added to the bill
Sweeteners tacked onto the bailout measure to attract votes from certain constituencies include:
Business aid: Provide business tax breaks, including some for production of, investment in and the use of renewable fuels.
AMT protection: Increase personal credits against the alternative minimum tax, shielding more than 20 million taxpayers from the tax.
Disaster relief: Grant natural disaster victims tax relief.
Rural help: Extend through 2011 a program that funds rural schools and local governments that have low property-tax bases because they lie within or are adjacent to federal lands.
Tax deductions: Extend until the end of 2009 the deduction for state and local general sales taxes.
Tax breaks: Extend until end of 2009 individual tax breaks, including deductions for higher education costs and teachers’ personal expenses.
Bank insurance: Increase, from $100,000 to $250,000, the limit on federal bank deposit insurance.
Source: Associated Press
The Senate bill
The $700 billion financial industry bailout would:
— Authorize $700 billion for the government to purchase troubled assets and buy equity in distressed financial firms.
— Require the Treasury Department to make rules to prevent excessive compensation for executives whose companies benefit from the rescue and cap deductibility of executives’ pay at $500,000 for firms that get $300 million or more from the program.
— Establish an oversight board for the program, a special investigator general to monitor it and regular government audits.
— Require that the president establish a plan to recoup the cost from the financial industry if, after five years, there are any losses.
— Phase in the money for buying troubled assets, with $250 billion available immediately, $100 billion to be released if the Treasury secretary certifies it is needed and the last $350 billion available with another certification but subject to a congressional vote.