Just add water (and hot air)…
Only in Washington can something grow so quickly. Just 10 days ago, Treasury Secretary Hank Paulson released this $700 billion 3 page plan for saving the economy. A few days later, it had morphed into a 110-page plan. And by Wednesday, it had grown to a 451-page plan, which was passed by the Senate earlier tonight by a vote of 74 to 25. The Associated Press has a good summary of the many add-ons — Christmas ornaments — here.
Of course, you have to wonder how many of those 74 Senators actually read those 451 pages before voting. My guess is very few. Keep in mind that last week, John McCain couldn’t even take the time to read the 3-page plan. Both McCain and Barack Obama voted in favor of the rescue plan.
After a quick skim — even I’m not that much a glutton for punishment — the executive compensation language seems to be pretty similar. Mark Borges, of Compensation Standards picked up a subtle language change having to do with giving incentives for unnecessary risk from “executive officers” in the old version to “senior executive officers.”
On accounting issues, the legislation delves into mark-to-market accounting, an issue we’re quite sure that every member of Congress — in the House and the Senate — are intimately familiar with. And, yes, we’re only being slightly snarky here.
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October 2nd, 2008 at 1:39 pm
I have found a couple of passages in the bailout bill that make it look like this structured as a revolving credit facility that never has to get paid back and is really only limited by the cap on the National debt.
For example in Sec 115: GRADUATED AUTHORIZATION TO PURCHASE, it does not say that Paulson can buy $700 Billion of assets, it says that the “authority shall be limited to $700 Billion outstanding at any one time.” So for example if He decided to buy $700 billion of assets, then he sold those assets for a loss, he would no longer be holding any assets, right? So, would he then be able to buy up another $700 billion of assets, sell them at a loss and keep paying for the shortfall by having the FED issue more debt? If so, then isn’t he really only limited by the Cap on the national debt?
Please tell me I am missing something.