Senate Offers Bailout Proposal 1.1 – Update

The Senate has stepped up to the plate and put some sidedishes on the proposal to hopefully entice more House Republicans to vote in favor of the bailout… Details will be released today however the article hints at the main goals for the new proposal…

Senate leaders scheduled a Wednesday vote on a $700 billion financial bailout package after accepting tax breaks and a higher limit for insured bank deposits in a bid to win House approval and send legislation to President Bush by the end of the week.

Top lawmakers said the Senate proposal, worked out after a day of behind the scenes maneuvering, would include tax breaks for businesses and alternative energy and higher government insurance for bank deposits.

“It has been determined, in our judgment, this is the best thing to move forward,” said Senator Harry Reid, Democrat of Nevada and the majority leader, in announcing the surprise move.

The senators issued no details of their proposal and said none would be available until Wednesday. The lawmakers were gambling that the tax package would appeal to lawmakers who helped sink the measure in the House on Monday, without driving off Democrats who have opposed extending the tax incentives without offsetting spending cuts elsewhere.

House Democratic leaders reacted cautiously to the new approach, with Representative Steny H. Hoyer of Maryland, the majority leader and a chief advocate of paying for the tax breaks, saying, “I am talking with my House colleagues about the Senate action and how to best proceed.”

But House Republican leaders, who said they had been advised about the Senate plan, said the new elements would appeal to their rank-and-file, which voted strongly against the legislation Monday. A spokesman for Representative John A. Boehner of Ohio, the Republican leader, said that “Mr. Boehner was consulted and gave the green light.”

Senator Christopher J. Dodd, Democrat of Connecticut and chairman of the Senate banking committee, said the Senate decided to move quickly, citing signs of regret from some House members after the markets plunged in response to their initial vote.

“I think their will is coming back having heard from their constituents,” Mr. Dodd said.

Lawmakers said the stock market response to the rejection was a sobering experience that could enhance prospects for a revised plan. Some anxiety lifted on Tuesday, as the Dow Jones industrial average rose 485 points, regaining more than half of the 778 points it lost on Monday.

Still, deep concern remained about credit markets, as the rate that banks charge one another shot higher — to a record high by one widely used measure — making borrowing more difficult.

President Bush joined the two major presidential candidates, Senators John McCain andBarack Obama, in calling for quick action to stabilize the markets and avoid what Mr. Bush characterized as the threat of “painful and lasting” damage to the economy.

Both presidential candidates and the Bush administration also endorsed the increase in bank deposit insurance.

On the morning after the sell-off on Wall Street, Congressional offices reported a shift in angry calls from constituents, with some now demanding that lawmakers take some corrective action — a distinct change from the outpouring of public opposition that contributed to the defeat of the plan.

“I started hearing from a lot of people who lost money on their investments thanks to the big drop on Wall Street yesterday,” said Representative Steven C. LaTourette, Republican of Ohio, who voted against the plan.

As they explored ways to tinker with the proposal in consultation with the Bush administration, all sides agreed any revisions would not change the underlying concept of granting the Treasury Department access to up to $700 billion to purchase — and eventually resell — troubled securities that were clogging the financial system.

It was a delicate balancing act for the architects of the proposal who had to be careful that in adding elements to entice new support they did not lose the support they already had.

“Obviously you don’t want to do something to lose votes,” said Senator Kent Conrad, Democrat of North Dakota, who was among Senate Democrats who huddled Tuesday to discuss possible alterations in the proposal.

Speaker Nancy Pelosi was noncommital about the new Senate plan Tuesday night, but other Democrats said it might be difficult to reject given the crisis and the array of tax breaks. “The Senate will vote tomorrow night, and the Congress will work its will,” Ms. Pelosi said. .

House officials spent much of Tuesday considering their own changes, including an extension of unemployment pay and a $1,000 tax credit for less affluent homeowners.

But those plans are not likely to advance given the Senate decision. While the Senate left the door open slightly to other additions to the bill, such revisions would need the agreement of the full Senate, and the House proposals were likely to be blocked by Senate Republicans.

“Opening this up all over again to other things may doom it,” Mr. Dodd cautioned.

The Senate proposal would cost more than $100 billion and extend and expand many individual and business tax breaks, including tax credits for the production and use of renewable energy sources, like solar energy and wind power.

The bill would also extend the business tax credit for research and development, expand the child tax credit, protect millions of families from the alternative minimum tax and provide tax relief to victims of recent floods, tornadoes and severe storms.

Members of the House and the Senate said the bill would create tens of thousands of jobs and reduce the nations’ dependence on foreign oil. But the two chambers have been at odds over whether and how to offset the cost of extending the many tax breaks covered by the legislation. The major obstacle has been Representative Hoyer of Maryland and other centrist Democrats.

Senate and House leaders had been debating whether the Senate, where support for the proposal runs deep, should vote first to provide some momentum for a second vote across the Capital Rotunda. Some senators were leery of going on the record if the legislation could not prevail in the House, but others backed the idea of the Senate taking the lead.

“I would support the Senate going first, which we would be willing to do as early as tomorrow if that would make this process successful,” Senator Hillary Rodham Clinton, Democrat of New York, said in a conference call on Tuesday.

With no new vote in the House even possible before lawmakers reconvene Thursday at noon, strategists for both parties spent Tuesday poring over tally sheets from Monday afternoon’s 228-to-205 outcome, trying to identify lawmakers who could be persuaded to switch their votes.

But winning over some determined opponents was not going to be easy.

“It was one of the best votes of my career,” said Representative Peter A. DeFazio of Oregon, leader of a group of liberal Democratic opponents of the Treasury plan who on Tuesday proposed a series of regulatory and legislative alternatives to the bailout.

But those Democratic opponents did say that they would be willing to back an increase to $250,000 from $100,000 in the amount of a bank deposit that would be insured by the federal government — an idea that on Tuesday gained fast currency as a consensus change in the initial plan.

Mr. Obama and Mr. McCain embraced the deposit insurance proposal early Tuesday, setting off a bit of a political tiff over who deserved credit for initiating it. House Republicans claimed to have offered the insurance increase in weekend negotiations over the plan only to have it rejected.

Democrats said they had no recollection of that provision being brought up in the chaotic talks, but top Democratic Congressional aides said the leadership was willing to add it to the bill and knew of no opposition. The chief uncertainty was whether it would significantly enhance the outlook for the legislation.

“Everybody is on board,” said one top House aide who spoke on condition of not being identified when talking about internal deliberations. “The question is, how many votes does it bring?”

With the House in recess for the observance of Jewish religious holidays, lawmakers consulted via conference call on their ideas for improving the legislation.

“Some will feel very virtuous about having voted against Wall Street and then turn around and find their constituents, generally, paid a huge price for that vote,” said Senator Robert Bennett, Republican of Utah, in exhorting his colleagues to “rise to the occasion” and pass the bill.

“I have faith that the members of the House and the members of the Senate will ultimately recognize their responsibility and do the right thing.”

Trying to calm the markets, Ms. Pelosi and Mr. Reid, the majority leader, released a letter to Mr. Bush, saying, “Working together, we are confident we will pass a responsible bill in the very near future.”

Senator Mitch McConnell of Kentucky, the Republican leader, was even more emphatic. “This financial crisis is going to be dealt with by Congress, and it’s going to be dealt with by Congress this week,” Mr. McConnell told reporters.

The bill can be downloaded in PDF format here:

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Senate Passes Housing Bill To Make The Rich Richer and the Poor Poorer

A Senate approved housing bill, designed allegedly to ease the crunch on foreclosures and encourage growth in the housing sector is nothing more than a Democrat driven hand out to those with money, with banks possibly making even more money off of those that cannot afford to keep their homes. In a worst case scenario, it wil create an over abundance of homes on the market and drive prices further down.

This will cause people to sell earlier, rich people can buy foreclosed property cheaper, abandoned homes will be fixed up by the big construction companies with the money to invest, then sold for them.

The Senate on Thursday passed a bipartisan package of tax breaks and other steps designed to help businesses and homeowners weather the housing crisis.

The measure passed by an impressive 84-12 vote, but even supporters of it acknowledge it’s tilted too much in favor of businesses like home builders and does little to help borrowers at risk of losing their homes.

The plan combines large tax breaks for homebuilders and a $7,000 tax credit for people who buy foreclosed properties, as well as $4 billion in grants for communities to buy and fix up abandoned homes.

Despite the impressive vote, the bill will be significantly redrawn by critics in the House who say it’s tilted toward businesses such as home builders instead of borrowers.

The White House opposes the plan but has not issued an explicit veto threat. It says parts of the legislation would make the problem worse by depressing some home values and the measure inappropriately uses taxpayer money to bail out lenders saddled with foreclosed houses.

The House is likely to reject key portions of the Senate measure, including $25 billion over three years in tax breaks for money-losing businesses such as home builders. A plan adopted Wednesday by a key House panel dropped that idea as well as the tax credit for purchasers of foreclosed homes.

Senate Majority Leader Harry Reid, D-Nev., acknowledged changes will be needed in upcoming talks with the House and the White House.

“This is just the beginning of the process,” Reid said. “This bill will go to the House. With the House and the White House we can come up with a piece of legislation fairly quickly.”

Before passing the measure, the Senate added $6 billion in unrelated tax breaks for renewable energy producers, despite Senate rules that say tax cuts need to be “paid for” with revenue increases elsewhere in the tax code.

The bill also offers $150 billion for pre-foreclosure counseling and stronger loan disclosure requirements

The $25 billion tax break the plan offers to homebuilders and other businesses absorbing heavy losses and the energy tax package were both dropped from an economic rescue plan enacted in February. Critics of those proposals said they were overly expensive and would not stimulate the economy.

But deepening public worries about the housing crisis appear to have emboldened lawmakers to swell the $9 trillion deficit to pay for the measures.

The $7,000 tax credit for the purchase of foreclosed homes, opponents argue, would unfairly reward purchases that would have happened anyway while possibly devaluing other homes. It also could give banks an incentive to foreclose on homes by subsidizing purchases of such properties.

The measure calls for a long-awaited modernization of the Federal Housing Administration that would enable more homeowners to refinance into loans backed by the Depression-era agency.

It includes $10 billion in tax-free mortgage revenue bonds to help homeowners refinance subprime loans, a move endorsed by President Bush.

Democrats Fighting Over FISA, Don’t Forget To Cross Your T’s and Dodd Your I’s

Dodd is trying to score points with the liberal voters in his resistance to Senate Intelligence Committee support of the NSA’s “warrantless wiretapping program”. Oddly enough SIC has support from both Democratats and Republicans…

The big controvery appears to be immunity for the phone companies, ultimately releasing them from being sued for providing law enforcement agencies access to their systems. Well let’s see if they do not cooperate with law enforcement agencies , then they will be in trouble for that as well.

In all reality, it is the law enforcement agencies that should be held accountable for proper implimentation of the program not the phone companies.

Is this a civil rights issue? Illegal search and siezure protects a person from improper searching of their person and property, should it extend to the use of public utilities? Once making a phone call you are using the phone companies property, you are using a regulated public utility that is governed by FCC in the US… I dare say to the liberals, once you do this, you are no longer dealing with your person or persoanl property.

Alas, the liberals think anything that will get them a vote is a civil rights issue… They hold a notion that anything that will get them a vote regardless of our nations’ security is worth fighting for. Let’s not confront the enemy, lets help them –  should be the liberal motto…

After an eight-hour mock filibuster by presidential candidate Sen. Christopher Dodd, D-Conn., the Senate Majority Leader Harry Reid, D-Nev., pulled a controversial bill that would have given phone companies immunity from lawsuits brought by people who believed their civil rights were abrogated when, after 9/11, the companies gave the government access to their data without requiring a warrant.

Dodd and the other Democratic senators running for president opposed the immunity provision in the bill, which also extends authorization for the National Security Agency’s warrantless wiretapping program.

The delay could leave Reid and the Democrats open to attacks that the Democrats are keeping the government from spying on terrorists.

Democrats in the House opposed the immunity provision, but it had gained bipartisan support in the Senate Intelligence Committee.

The information the companies provided to the government since the terror attacks is the subject of several ongoing lawsuits.

Reid agreed with Dodd on the issue of immunity but brought the bill to the Senate floor to move it along in the legislative process. The Protect America Act temporarily modified the 1978 Foreign Intelligence Surveillance Act to allow the NSA to conduct its warrantless domestic wiretapping program.

Reid said pulling the bill would allow senators to give it a more thorough examination later on. He has called on the White House to provide its classified legal reasoning for the program.

“The Senate is committed to improving our nation’s intelligence laws to fight terrorism while protecting Americans’ civil liberties,” Reid said.

“We need to take the time necessary to debate a bill that does just that, rather than rushing one through the legislative process. While we had hoped to complete the FISA bill this week, it is clear that is not possible,” he said.

Dodd took a break from the campaign trail to spend more than eight hours today on the Senate floor, lobbying against the bill that would update the Protect America Act, which Congress passed in August.

“It covers up an immense alleged violation of civil liberties,” Dodd said, assailing the telecom immunity provision on the Senate floor.

“This is not some small matter, not a one-time event, but one that went on for five years here in a rather elaborate and extensive way on which I’ll go into detail. Immunity is wrong because of what it represents.

“This is a weakening of the rule of law that concentrates power in the hands of the executive,” he said.

Dodd had offered an amendment to strip the immunity clause from the bill the Senate is considering.

If his amendment had been rejected, as it was likely to be since a number of key Democrats on the Senate Intelligence Committee have already approved the immunity clause, Dodd threatened to filibuster on the Senate floor.

Senate Intelligence Committee Chairman John Rockefeller, D-W.Va., said he was disappointed by the delay.

“I’m disappointed legislation to modernize and improve FISA will now have to wait until January. As I’ve said many times, it is one of the most important bills before Congress, and one that should not be rushed in the final hours before the Protect America Act expires.”