Final details still to come
http://www.msnbc.msn.com/id/26884523/
WASHINGTON - After a breakthrough on a $700 billion Wall Street bailout, lawmakers and Bush administration now must settle the final details on a rescue intended to keep credit flowing and avert a crippling recession.
"This is the bottom line: If we do not do this, the trauma, the chaos and the disruption to everyday Americans' lives will be overwhelming, and that's a price we can't afford to risk paying,"? Sen. Judd Gregg, the chief Senate Republican in the talks, told The Associated Press on Sunday. "I do think we'll be able to pass it, and it will be a bipartisan vote."?
Congressional leaders, who announced the tentative deal after marathon negotiations that ended early Sunday, hope to have a House vote Monday; a Senate vote would come later.
"We've still got more to do to finalize it, but I think we're there,"? said Treasury Secretary Henry Paulson, who participated in the talks at the Capitol.
The presidential nominees came behind the outlines of the bailout. "This is something that all of us will swallow hard and go forward with,"? said Sen. John McCain, R-Ariz. "The option of doing nothing is simply not an acceptable option."?
Sen. Barack Obama, D-Ill., sought credit for taxpayer safeguards added to the initial proposal from the Bush administration. "I was pushing very hard and involved in shaping those provisions,"? he said.
Under the plan, the government would purchase mortgage-backed securities and other bad debts held by banks and other investors. The money should help troubled lenders make new loans and keep credit lines open. The government would later try to sell the discounted loan packages at the best possible price.
At the insistence of House Republicans, some money would be devoted to a program that would encourage holders of distressed mortgage-backed securities to keep them and buy government insurance to cover defaults.
The legislation would place "reasonable"? limits on severance packages for executives of companies that benefit from the rescue plan, said a senior administration official who was authorized to speak only on background.
It also calls for the financial sector to help make up the difference if the government does not recoup its investment in five years, the official said, but details remained unclear. The government would receive stock warrants in return for the bailout relief, giving taxpayers a chance to share in financial companies' future profits.
To help struggling homeowners, the plan would require the government to try renegotiating the bad mortgages it acquires with the aim of lowering borrowers' monthly payments so they can keep their homes.
"Nobody got everything they wanted,"? said Democratic Rep. Barney Frank of Massachusetts, chairman of the House Financial Services Committee. He predicted it would pass, though not by a large majority.
Gregg, R-N.H., said he thinks taxpayers will come out as financial winners. "I don't think we're going to lose money, myself. We may, it's possible, but I doubt it in the long run,"? he said.
Frank appeared on C-SPAN, Obama was on CBS' "Face the Nation,"? while McCain spoke on "This Week"? on ABC.
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