The Bush administration is asking Congress for US$700 billion (Dh2.57 trillion) to buy up troubled assets from financial institutions. Congressional Democrats are proposing to add several limits and requirements. Here are the main elements of both plans:
Give the Treasury secretary broad authority to buy up to $700bn in troubled assets from any financial institution if he decides, in consultation with the chairman of the Federal Reserve, in a bid for market stability for market stability. Raise the $10.6tn statutory limit on the national debt to $11.3tn. Allow the Treasury secretary to buy, hold and sell the assets in any way he sees fit. That includes the ability to go outside normal government contracting practices to hire private companies to manage them. In return the government should report to congressional budget, tax-writing and financial services committees within three months of using the authority and every six months thereafter. Shield rescue program from judicial review, which will last for two years.
Require that companies benefiting from the bailout do not give so-called "golden parachutes" to executives and have rules to revoke bonuses awarded based on bogus claims. Allow judges to rewrite the terms of bankrupt homeowners' mortgages so they can afford to stay in their homes. Allow the government to take an equity stake in participating companies to share in future profits. Require that the government draft a plan to renegotiate the mortgages it purchases to help homeowners avoid foreclosure. Create a congressional oversight panel to scrutinize the rescue program and subject it to court review. Limit the program to financial institutions with "significant operations" in the United States and exclude foreign central banks and companies owned by foreign governments. * AP