Bailout Plan Supported by Both Houses of Congress

House and Senate representatives met again on Saturday to continue to deal with the economic crisis. At midnight Saturday they announced a proposal had been reached.

WASHINGTON (Catholic Online) - At midnight Saturday night the Senate and House of Representatives came to a final agreement on a bailout package for the ailing United States economy. The details are feverishly being developed so that a final plan can be delivered for approval before Wall Street opens on Monday.

In a joint statement, House Speaker Nancy Pelosi, D-Calif., Senate Majority Leader Harry Reid, D-Nev., Treasury Secretary Henry Paulson and House Republican Whip Ray Blunt, R-Mo, announced that an agreement had been reached in a marathon session that began on Saturday afternoon.

Paulson stated, "We've been working very hard on this and we've made great progress toward a deal which will work and will be effective in the marketplace and effective for all Americans. We've still got a lot to do to finalize it, but I think we're there."

In outlining the key elements of the plan, the Associated press reported that the plan would include the following elements:

President Bush Saturday increased his efforts to bring about a proposal and also convince the public of the necessity, importance, and urgency of the effort.

In his weekly Saturday address, the President stated, "If it were possible to let every irresponsible firm on Wall Street fail without affecting your family, I would do it. But that is not possible. The failure of the financial system would mean financial hardship for many of you."

1. The Treasury Department will purchase distressed mortgage-backed securities and other bad debt held by financial institutions up to a maximum of $700 billion of.

2. The bailout will start with an initial outlay of $350 billion.

3. The government will then attempt to sell the discounted loan packages at the best possible price.

4. The government will receive stock warrants in return for the bailout, providing taxpayers with an opportunity to share in the future profits of financial companies. These warrants will also give the holder the right to buy stock in the future.

5. Some money will be devoted to a program that will encourage holders of distressed securities to keep them and buy government insurance to cover defaults.

6. The government will try renegotiating bad mortgages it acquires with the aim of lowering borrowers' monthly payments so they can keep their homes.

7. Severance packages will be limited for executives of companies that benefit from the rescue plan.

---

'Help Give every Student and Teacher FREE resources for a world-class Moral Catholic Education'