Text of the Bailout Bill (the Devil is in the details)

Too Rich To Fail

Too Rich To Fail

From The Heritage Foundation’s blog The Foundry comes the text of the mortgage-rescue provision of the bailout plan currently under consideration in Congress

LEGISLATIVE PROPOSAL FOR TREASURY AUTHORITY TO PURCHASE MORTGAGE-RELATED ASSETS

Section 1. Short Title.

This Act may be cited as ____________________.

Sec. 2. Purchases of Mortgage-Related Assets.

(a) Authority to Purchase.–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.

(b) Necessary Actions.–The Secretary is authorized to take such actions as the Secretary deems necessary to carry out the authorities in this Act, including, without limitation:

(1) appointing such employees as may be required to carry out the authorities in this Act and defining their duties;

(2) entering into contracts, including contracts for services authorized by section 3109 of title 5, United States Code, without regard to any other provision of law regarding public contracts;

(3) designating financial institutions as financial agents of the Government, and they shall perform all such reasonable duties related to this Act as financial agents of the Government as may be required of them;

(4) establishing vehicles that are authorized, subject to supervision by the Secretary, to purchase mortgage-related assets and issue obligations; and

(5) issuing such regulations and other guidance as may be necessary or appropriate to define terms or carry out the authorities of this Act.

Sec. 3. Considerations.

In exercising the authorities granted in this Act, the Secretary shall take into consideration means for–

(1) providing stability or preventing disruption to the financial markets or banking system; and

(2) protecting the taxpayer.

Sec. 4. Reports to Congress.

Within three months of the first exercise of the authority granted in section 2(a), and semiannually thereafter, the Secretary shall report to the Committees on the Budget, Financial Services, and Ways and Means of the House of Representatives and the Committees on the Budget, Finance, and Banking, Housing, and Urban Affairs of the Senate with respect to the authorities exercised under this Act and the considerations required by section 3.

Sec. 5. Rights; Management; Sale of Mortgage-Related Assets.

(a) Exercise of Rights.–The Secretary may, at any time, exercise any rights received in connection with mortgage-related assets purchased under this Act.

(b) Management of Mortgage-Related Assets.–The Secretary shall have authority to manage mortgage-related assets purchased under this Act, including revenues and portfolio risks therefrom.

(c) Sale of Mortgage-Related Assets.–The Secretary may, at any time, upon terms and conditions and at prices determined by the Secretary, sell, or enter into securities loans, repurchase transactions or other financial transactions in regard to, any mortgage-related asset purchased under this Act.

(d) Application of Sunset to Mortgage-Related Assets.–The authority of the Secretary to hold any mortgage-related asset purchased under this Act before the termination date in section 9, or to purchase or fund the purchase of a mortgage-related asset under a commitment entered into before the termination date in section 9, is not subject to the provisions of section 9.

Sec. 6. Maximum Amount of Authorized Purchases.

The Secretary’s authority to purchase mortgage-related assets under this Act shall be limited to $700,000,000,000 outstanding at any one time

Sec. 7. Funding.

For the purpose of the authorities granted in this Act, and for the costs of administering those authorities, the Secretary may use the proceeds of the sale of any securities issued under chapter 31 of title 31, United States Code, and the purposes for which securities may be issued under chapter 31 of title 31, United States Code, are extended to include actions authorized by this Act, including the payment of administrative expenses. Any funds expended for actions authorized by this Act, including the payment of administrative expenses, shall be deemed appropriated at the time of such expenditure.

Sec. 8. Review.

Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.

Sec. 9. Termination of Authority.

The authorities under this Act, with the exception of authorities granted in sections 2(b)(5), 5 and 7, shall terminate two years from the date of enactment of this Act.

Sec. 10. Increase in Statutory Limit on the Public Debt.

Subsection (b) of section 3101 of title 31, United States Code, is amended by striking out the dollar limitation contained in such subsection and inserting in lieu thereof $11,315,000,000,000.

Sec. 11. Credit Reform.

The costs of purchases of mortgage-related assets made under section 2(a) of this Act shall be determined as provided under the Federal Credit Reform Act of 1990, as applicable.

Sec. 12. Definitions.

For purposes of this section, the following definitions shall apply:

(1) Mortgage-Related Assets.–The term “mortgage-related assets” means residential or commercial mortgages and any securities, obligations, or other instruments that are based on or related to such mortgages, that in each case was originated or issued on or before September 17, 2008.

(2) Secretary.–The term “Secretary” means the Secretary of the Treasury.

(3) United States.–The term “United States” means the States, territories, and possessions of the United States and the District of Columbia.

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2 responses to “Text of the Bailout Bill (the Devil is in the details)

  1. R700 Billion Dollar Bail Out Fails!

    Well there we have it, the first round to getting the “bail out” plan to be passed has officially failed! Although the markets, the top news agencies, chief economists and the likes of Warren Buffet have predicted that America has no choice but to accept the proposal – it has failed!

    Even I am surprised to say the least, as I am sure most of you are too! After reading comments such as – PASS THE PLAN OR FACE ECONOMIC MELTDOWN – it has done just that! The plan has been failed in congress.

    The question certainly on everybody’s mind now is, are they mad, are they trying to ruin the country, or are they once again simply playing politics instead of thinking about America first?

    The question is who is to blame again? Someone is going to blame someone else and Republicans are going to blame Democrats and vice versa. As the news breaks on CNN the latest statistics show that the total votes for the plan were 205 and against were 228! Democrats for the plan = 140, against = 95. Republicans for the plan = 65, against = 133.

    Does this matter who was for and who was against – NO IT DOESN’T! Who brought the plan to the table in the first place – YES GUESS WHO?

    The fact is it did not pass and we can now either FIX THE BLAME, or for once Congress can sit down and START FIXING THE PROBLEM – NOW!

    The fact that people are already blaming each other for delivering a bad speach – I am referring to the Republican comments on Nancy Pelosi’s speach, is abolutely BULLSHIT!

    COME ON AMERICA – we are grown ups, not bloody kids! Who are these people? A plan of this nature is certainly based on “documented facts”, “written drafts” and NOT ON SOMEBODY’S BLOODY SPEACH!

    AMERICA IS IN TROUBLE – GRAVE TROUBLE, yet we still accommodate leaders who are voicing their political emotions and how they feel about the other!

    WHAT ABOUT US YOU FOOLS?

    What about the people in the middle class who are fighting to survive day by day, and simply don’t have the luxury of waiting for you boys to finish your party games and your power fits??

    Please read my post on BARBARIANS AT THE GATE and you will relaise excatly what I mean! We have more enemies of ignorance in our midst than all the terrorists in this world put together!

    WORK THIS OUT – AND DO IT NOW!

    Visit my blogg at: http://chasemorgan.wordpress.com

    Regards

    Chase Morgan

  2. BAIL OUT, OR – BARBARIANS AT THE GATE?

    In the midst of the unsettled financial markets there’s been general agreement about one thing: the outcome of the current crisis will be far-reaching changes to the blobal financial system. For example, Morgan Stanley chief economist Stephen Roach believes the world’s central banks are now being forced to look afresh at how financial bubbles should be handled. Up to now their attitude has been that the markets must correct financial bubbles themselves.

    However, the massive emergence of various kinds of derivative instruments created such huge inverted pyramids above an underlying asset class (such as prime mortgages) that things get out of hand when bubbles burst. Roach believes that central banks can hardly afford to condone bubbles in the future.

    The question to be answered is: How and when they must take steps to avoid meltdowns?
    Fin Week

    As some of Wall Street’s most venerable financial institutions teeter on the brink of self-destruction and are either taken over – in the case of Bear Sterns – or, as in the case of Lehman Brothers, allowed to implode, very few financial sectors appear capable of weathering the storms.

    In view of the “bail out” agreement reached this past weekend it seems as if financial markets throughout the world will however react positively to this announcement. An announcement in my opinion not made by choice, however rather by force! Financial Guru – Warren Buffet correctly remarked that if the “bail out” plan was not approved – the American Economy would face certain “meltdown”!

    In lieu of this it stands to reason that there weren’t much alternatives than to see the bail out plan pass through congress? A certain relief for most – al be it temporary. Both Presidential Candidates voted for the plan as has been seen. Not much of a choice by the looks and sounds of it!

    Certainly the pressing question on our minds should be to now take a calm and responsible view back, on what has caused this catastrophy? We should all agree that it is a catastrophy, although suspended perhaps for the moment. One can only call it “suspended” as this has still to play out and we will see how this effects the struggling markets and economy alltogether in the short, medium and long term!

    IS THERE ANOTHER 700 BILLION US$ available should this not work?

    One cannot help but wonder after pondering on all of this for months on end – who is the biggest terrorist or threat facing America after all? Is it Osama Bin Laden – or worse, is it someone or something, much closer to home? I certainly don’t want to be in the shoes of the current President and wonder if anybody in his right mind would like to be in the future President’s shoes!

    However, fill the shoe we have to, and it is now up to every single one of us to realise that the problems facing America is far greater than we want to believe. Republican, Democrat or Independant all stood together, cried together and worked together when the tragedy of 911 struck!

    The tragedy of September 2008 is far worse!

    We don’t have the liberty of taking on the world at present! No matter how righteous our beliefs are, no matter how convinced we are that terrosism should be fought in every corner, every nook and cranny, and in any place in the world. More Americans have died in this war than in 911 and we are not calling it a tragedy or catastrophy? No, we accept it because we are dying for our country, our beliefs and our ego!

    Senator McCain says that he will not see to it that we pull out of this war before victory! He knows how it feels to come home defeated and to live to the consequences of knowing that a lot of people, or so he believes – has died in vain!

    Are we staying at war because we don’t want to feel bad? Are we loosing our children because of ego’s?
    Or worse, are we staying at war to loose our country and our very excistence?

    WE ARE FACING A POSSIBLE MELTDOWN!

    IS THIS A BAIL OUT – OR ARE THE BARBARIANS KNOCKING AT THE GATE?

    Undoubtedly the bail out is necessary, could it have been avoided – too late to ask! Can it be avoided in the future – we have no alternative but to believe it can! The question is how?

    Now, we can tighten up the budgets on every field of the economy, we can harness in every corporate company to be more dilligent in their dealings. We can increase or decrease taxes, impose new legislation, fire the wrong doers or restructure government to be more lean and mean.

    All of this is however in vain, if we are still going to remain a “country at war”!

    It’s simple economics people! The war is killing America! It costs us a hell of a lot more than it costs Osama Bin Laden and Company to fight this! Perhaps he is a lot more astute than we will give him credit for! Perhaps he has gone into hiding, knowing that sooner or later – the “meltdown” will begin!

    Sure we need to keep face in the world! Are we doing this now?

    I don’ think so!

    It is my opinion that if we wan’t to weather the greatest economic storm ever to hit our shores, we need to act and act now, before it’s to late! Our leader, Republic or Democrat will have to realise that we can’t stay at war and build our economy up again – it’s childish to even contemplate that.

    If the world believes we are doing the right thing fighting terrorism offshore, then the world should climb in and help finance this war much more than they are currently doing! If not – we need to pack up and go home before it is too late!

    No other country in the world other than America is facing a “meltdown”? Why should we?

    I know there is a lot more to it than a normal citizen like you and me know about this alltogether. However, it is time we harness our strength as ONE NATION and forget about politics for now. We need to think about America – all of us!

    The “Barbarians are at our Gate”, not in Irak or Pakistan!

    Join me in my blog: http://chasemorgan.wordpress.com

    GOD BLESS US ALL!

    Chase Morgan