Henry Paulson’s bank bailout bill never had a chance of making it through Congress unencumbered. The only question was how may boat anchors the House and Senate would attach. The sinking of the proposal began today.
There has already been talk of the plan being expanded to cover foreign banks with US operations, credit card and auto debt, and even mechanisms set up to asset homeowners with their mortgages.
Adding most of these measures could push the cost of the program above $1.5 trillion. Adding all of them might drive that number as high as $2 trillion.
According to MarketWatch, "The U.S. government would get shares in financial firms from which it would purchase bad debts under a new program designed to rescue the financial sector, according to a draft bill circulating in the Senate. The bill also calls for curbing pay to executives of firms who participate in the program and would aid individual homeowners."
The revisions spit in the face of Paulson and The White House. Their plan was to have a simple bill which would only handle buying toxic mortgage paper from banks in a series of auctions meant to push those assets aside and restart the national credit system.
No such luck. The fighting has begun in earnest. There will be no bill for the President to sign on Friday
Douglas A. McIntyre
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