Congressional lawmakers have reached agreement on the final details of a $700 billion U.S. financial market rescue package that will release $250 billion of funding immediately.
The 106-page document, entitled the Emergency Economic Stabilization Act of 2008, calls for $700 billion of funding to be delivered in stages.
The plan will also limit compensation for executives at companies that sell mortgage assets to the Treasury. Also, companies that participate in the plan will be prohibited from offering so-called "golden parachutes". Those companies will also not be allowed to deduct executive salaries of more than $500,000.
The oversight board will consist of the Federal Reserve Chairman, the Securities and Exchange Commission Chairman Christopher Cox, the Federal Home Finance Agency director and the Housing and Urban Development secretary.
It will also give the Treasury the option to take ownership stakes in companies that participate.
The Treasury will be able to establish an insurance program to guarantee the troubled assets of companies, including mortgage-backed securities purchased before March 18, 2008. The risk-based premiums would be paid by the industry.
Speaking at a press conference to announce the finalization of the bill, Senator Judd Gregg said the plan gives Treasury Secretary Henry Paulson the resources and authority to restore the credit markets.
Speaking at a press conference overnight to announce a tentative agreement between House Democrats and Republicans over the bill, Paulson said, "We've made great progress towards a deal that will work."
On Sunday evening, Speaker Nancy Pelosi announced that a bill had been finalized and posted on the house financial services' committee website. She said the bill would be brought to the floor on Monday.
By Stephen Huebl
©CEP News Ltd. 2008
