Congress compromises on rescue
House Democrats Barney Frank (left) Christopher Dodd (right)
TEXT OF STORY
Renita Jablonski: This whole government bailout thing is playing out like one of those movies when you're sure the ending is just around the corner -- but nope, more drama, no telling how it's going to end.
Around 6 Eastern last night, the White House and Democrats signed onto a deal to rescue the U.S. financial system. House Republicans stretched out that scene another two and a half hours. That's how long it took them to get behind the agreement. This morning, still lots of questions.
As Marketplace continues its coverage of the financial crisis, our Washington Bureau chief, John Dimsdale, starts us off with what's in the compromise.
John Dimsdale: Negotiators say they've added protections to the $700 billion rescue plan to keep taxpayers from footing the bill. House Democrat Barney Frank says ultimately, the banking industry will cover any losses.
Barney Frank: At the end of five years, the president must send us an accounting. And if there is a shortfall, the president must send us a proposal to collect that shortfall, not all in one year, a reasonable period, from the institutions and industries that benefited.
To lower the potential cost, the deal gives banks the option of buying government-run insurance for their bad debts. Republicans insisted on the provision.
The compromise also doles out the $700 billion in installments. Initially, Treasury can spend only half that much buying up bad debts, and Congress would then have the chance to block additional money. Despite warnings of an economic catastrophe if Congress doesn't act, many members from both the right and the left say they cannot vote for the bailout.
Darrell Issa is a Republican from California:
Darrell Issa: I expect to vote against this bill. From what I've seen of it, it does not do what the American people are asking to do, which is to protect their tax dollars.
Ohio Democrat Marcy Kaptur is rarely on the same side with Congressman Issa:
Marcy Kaptur: We are told we will have a bill -- a trillion-dollar bill -- to review soon. And have less than 24 hours, with no regular hearings, to try to vote on this.
House leaders plan to vote later today. If it passes, the Senate expects to take it up on Wednesday.
In Washington, I'm John Dimsdale for Marketplace.