A Wall Street bailout package that could potentially see $700 billion in taxpayer dollars go to the beleaguered banking and finance industry is creeping towards completion.
But it appears that U.S. lawmakers have recognized the flaws in the original proposal and have added significant oversight, taxpayer protection, and some assistance for people other than the well-compensated Wall Street titans that got the nation into this mess.
Legislators in Congress could pass the bailout bill as early as tomorrow, after the weekend saw it grow significantly larger than the bill originally proposed by the George W. Bush administration.
That rendition requested unlimited and unchecked power to purchase the toxic, sub-prime mortgage-related assets that are hampering U.S. banking institutions.
Added to the legislation, according to reports, are stipulations that limit excessive compensation packages for finance executives and require that the government receives shares in any company selling assets to the U.S. Treasury.
That way, when the expected economic upswing occurs the government and the taxpayers will be able to recoup some or all of their investment.
An oversight structure, which was sorely lacking from the initial proposal, has been added into the bill currently being drafted in Washington, D.C., along with protections and assistance for homeowners facing foreclosure.
Also, if government-owned stakes do not create the kind of revenue expected, a “Wall Street” tax could come into play in five years, providing a safety valve to recoup money spent on the bailout plan.
At the very least Congress appears to have watered down the Bush administration’s original proposal, reducing the inital appropriation to $350 billion, with an additional $350 billion available following intense oversight and review of the initial process.
It is now in a smaller, more regulated form that provides additional bailout oversight with a chance that taxpayers and the government may actually see a return on their investment.
The next step is increased banking regulations. The bankers and the nation’s great financial minds, who greedily invested in these bad assets and risky subprime mortgages, have shown that greed triumphs over good judgment.
Until that situation reverses itself, the U.S. government’s job is to make sure that judgment is bolstered by law.