The $700 billion financial rescue that the House will vote on today is a significant improvement over the drafts released last Friday, and the Friday before that. According to the Congressional Budget Office, the plan will eventually cost “substantially less” than the oft-quoted amount of $700 billion, and it even has the chance of making taxpayers money. Taxpayers will receive warrants from the firms that sell distressed assets to the government and, if after five years the plan has lost money, a fee will be assessed upon financial institutions to …
This weekend Treasury Secretary Henry Paulson announced that mortgage giants Freddie Mac and Fannie Mae will be placed in a government conservatorship that closely resembles a bankruptcy reorganization. The move puts U.S. taxpayers on the hook for $5.4 trillion in outstanding mortgage debt and commits the government to provide as much as $100 billion to each company in capital commitments. Two months ago, the Congressional Budget Office estimated that the ultimate cost to taxpayers of such a move would be $25 billion. But bankers hired by the Treasury Department now …
The Associated Press is reporting that Democratic and Republican lawmakers have reached a tentative deal today on a stimulus package. First the good news: the giveaway does not include money for food stamps, unemployment insurance benefits or infrastructure projects. Also, although it is not mentioned in the AP story, we hear the deal does include some pro-growth tax cuts including accelerated depreciation for businesses. Now the bad: the give away does include $300 checks for everyone receiving a paycheck regardless of whether they pay income taxes or not. Also only …
