Congressional leaders are raising questions about efforts by the Bush administration to hurry a $700 billion rescue plan bill through Congress.
Treasury Secretary Henry Paulson and President Bush have been urging Congress to pass the bill quickly,
“Obviously, there will be differences over some details, and we will have to work through them,” Bush said today in a statement about the bailout bill.
“That is an understandable part of the policy making process,” Bush said. “But it would not be understandable if members of Congress sought to use this emergency legislation to pass unrelated provisions, or to insist on provisions that would undermine the effectiveness of the plan.”
Critics of the bailout bill have attacked a provision that appears to state that, “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.”
“The Bush administration has called on Congress to rubber stamp its bailout legislation without serious debate or efforts to improve it,” Senate Majority Leader Harry Reid, D-Nev., said today on the Senate floor. “That will not happen…. Democrats believe that there should be protection for the taxpayers who are footing the bill for this legislation. That begins with more oversight, more transparency, more accountability and more controls to prevent conflicts of interest.”
The final version of the bailout bill should include limits on executive compensation and limits on how the bill would benefit private shareholders, Paulson said.
The final version also should help Americans who are facing foreclosure, Paulson said.
Rep. Henry Waxman, D-Calif., says he believes the bailout proposal would maximize returns for Wall Street and minimize protections for the taxpayer.
“The taxpayer is being asked to risk billions to protect the bonuses of investment bankers,” Waxman says.
Congress should insist on executive compensation limits and greater financial transparency, Waxman says.
“We should not give bailouts to firms that continue to conceal their balance sheets from investors and the government,” Waxman says.
At press time, the bailout bill did not have a bill number, and a copy was not available on Thomas, the congressional bill tracking system.
Many news organizations and trade groups have what appear to be leaked versions of the text of the bill.
The following is a text of the Treasury Department rescue plan bill draft posted on the Web site of the National Association of Federal Credit Unions, Washington:
LEGISLATIVE PROPOSAL FOR TREASURY AUTHORITY TO PURCHASE TROUBLED ASSETS
Sec. 1. Short Title.
This Act may be cited as ____________________.
Sec. 2. Purchases of Troubled 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, Troubled Assets from any Financial Institution, as those terms are defined in section 12 of the Act.
(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 Troubled 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;
(2) protecting the taxpayer; and
(3) take appropriate steps to manage any conflicts of interest in the hiring of contractors or advisors. Any regulation issued under this authority shall not be subject to section 553 of title 5, United States Code.
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 Troubled Assets.
(a) Exercise of Rights. – The Secretary may, at any time, exercise any rights received in connection with Troubled Assets purchased under this Act.
(b) Management of Troubled Assets. – The Secretary shall have authority to manage Troubled Assets purchased under this Act, including revenues and portfolio risks therefrom.
(c) Sale of Troubled 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 Troubled 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 Troubled 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 Troubled 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 Act, the following definitions shall apply:
(1) Financial Institution. – The term “Financial Institutions” means any institution including, but not limited to, banks, thrifts, credit unions, broker-dealers, and insurance companies, having significant operations in the United States; and, upon the Secretary’s determination in consultation with the Chairman of the Board of Governors of the Federal Reserve, any other institution he determines necessary to promote financial market stability.
(2) Secretary. – The term “Secretary” means the Secretary of the Treasury.
(3) Troubled Assets. – The term “Troubled 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; and, upon the determination of the Secretary in consultation with the Chairman of the Board of Governors of the Federal Reserve, any other financial instrument, as he determines necessary to promote financial market stability.
(4) United States. – The term “United States” means the States, territories, and possessions of the United States and the District of Columbia.