From the Wall Street Journal:
A summary of the tentative agreement released by Sen. Pelosi's office said the plan "gives taxpayers an ownership stake and profit-making opportunities with participating companies; puts taxpayers first in line to recover assets if a participating company fails; (and) guarantees taxpayers are repaid in full -- if other protections have not actually produced a profit."
The $700 billion would be available in phases. The first $250 billion will be "immediately available" to the Treasury Secretary, and $100 billion available "upon report to Congress," and $350 billion "available only upon Congressional action," according to a summary from the office of House Minority Whip Roy Blunt (R., Mo.), the No. 2 House Republican who was at negotiations.
A summary from Sen. Pelosi's office said the final deal included "cutting in half the administration's initial request for $700 billion and requiring Congressional review for any future commitment of taxpayers' funds."
The Pelosi summary also said the legislation will expand the range of firms that can sell troubled assets to the government to include pension plans, local governments and community banks serving "low- and middle-income families."
This looks like a more palatable bill to House Republicans than the one originally proposed. It avoids some of the pork to groups like ACORN that the previous bill would have contained, and can perhaps be called a minor victory.
The summary also said the legislation would institute new executive compensation requirements for participating companies, including "no multi-million dollar golden parachutes," limits on compensation generally, and the ability to recover "bonuses paid based on promised gains that later turn out to be false or inaccurate."
President George W. Bush spoke with Sen. Pelosi earlier in the evening about the discussions, and the White House welcomed news of the deal. "We're very pleased with the progress tonight and appreciate the extraordinary bipartisan efforts being made to stabilize our financial markets and protect our economy," White House spokesman Tony Fratto said.
The next step will involve selling the deal to rank-and-file lawmakers, who have been unhappy over signing on to a giant bailout package just weeks before the November elections. Rep. Blunt said that he planned to talk to colleagues and get reactions.
Lawmakers entered a new round of meetings shortly after 7:30 p.m. EDT, with pizzas headed to one office and a platter of cold cuts from sandwich chain Cosi being delivered into the House Speaker's office. By roughly 11:30 p.m., what Reid described as a "breakthrough" came in the form of an idea from Pelosi that was enough to advance talks.
"She took over at the last minute," a House staffer familiar with the talks said Sunday morning. "The last hour-and-a-half she really brought things together and made it possible to reach this point."
She found middle ground on a plan to allow the federal government to recoup money for taxpayers if the asset-purchase program isn't making money after a certain amount of time. A House leadership aide said early Sunday morning that details were not immediately available. But the general concept was to provide Congress with a mechanism that would be triggered perhaps within five years to allow lawmakers to offset some, if not all, of the bailout costs.
Offers and counteroffers were flowing back and forth all night. Among the offers extended by Democrats: an agreement to drop a proposal to devote 20% of potential profits to an affordable housing fund, according to a Senate staffer close to the talks.
I don't like Pelosi's fingerprints being all over this, but it looks like it has the potential to pass tomorrow.
Republican nominee Sen. John McCain, interviewed by ABC's "This Week," said, "This is something that all of us will swallow hard and go forward with."
Key cuts from the previous attempt include a suspension of the existing mark-to-market rule and the following:
- Provision to provide unions and other activist groups with proxy access for corporate boards
- Provision to mandate shareholder votes on compensation issues (union priority)
- Diversion of funds into a housing fund to support left-wing activist groups like ACORN
- A provision to allow trial judges to arbitrarily adjust mortgages, creating bonanza for trial lawyers
- A provision to require the government to sell to state and local governments at a discount homes the government acquires as a result of foreclosure
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