The process to produce the Treasury Asset Recovery Plan from the US House has moved forward in the Senate. They have wisely remained it the Emergency Economic Stabilization Act of 2008, something I believe/suggested would help sell it to Main Street.
Here's the laundry list: "(1) to immediately provide authority and facilities that the Secretary of the Treasury can use to restore liquidity and stability to the financial system of the United States; and (2) to ensure that such authority and such facilities are used in a manner that—(A) protects home values, college funds, retirement accounts, and life savings; (B) preserves homeownership and promotes jobs and economic growth; (C) maximizes overall returns to the taxpayers of the United States; and (D) provides public accountability for the exercise of such authority."
This has a completely different vibe compared to the 2.5 page grab-n-go bill that Paulson/Bernanke presented last week. Friend, neighbors, and countrymen, it's all about how you market it. This current form is what it should've been to get passed in the first place.
Now the bill looks like bratwurst stuffed with a special mystery meat to get broader approval from all walks of the political taste spectrum. The current bill has expanded from the US House bill of 102 pages to a whopper of 451 pages. Now, paper mills are revving up for the final package. From tax break extenders ($149 billion over 10 years) to alternative energy to an increase in FDIC insurance for deposits up to 250k to authority to suspend mark-to-market accounting, this bill is going to pass the Senate when they vote on it tonight.
- GOP Members Forging Alternative Bailout Plan
I don't agree with it or like it, but this is how it works. What this glaringly points out is the lack of political foresight by Paulson/Bernanke in understanding how our political process works. Yes, the United States has a messy, ugly process.....but you can't ignore how it works to get what you want. Especially if you're asking for extra-ordinary power and money. The crushing drop in the US stock market which wiped out more in dollar terms (over $1 trillion) than the cost of the bill did the best job of selling this to constituents. As predicted on Friday, voters opened their 401ks/pension statements and then called their Congressmen and Senators to express their new way of thinking about the bailout plan.
Last night on "Closing Bell" I said that if the US House of Representatives brings this bill up again for a vote, it will pass. Why? There's no way Nancy Pelosi will bring up a bill that will fail because she will lose her job and so will many Democrats in the election. Congress has an extremely low approval rating from the voters now and anything can easily shift sentiment to the other side. I believe that as soon as Pelosi announces a vote, the deal is done. Watch for it.