The Senate completed it’s actions intended to relieve the nation’s troubled financial systems on Wednesday. An amendment to a House bill added the bailout provisions and passed 74-25. The twenty five consisted of progressive Democrats and conservative republicans; the conservatives, on the whole, unhappy with any intervention in the markets and the progressives unhappy, on the whole, with a lack of protections for individuals and a lack of control over the money. Oh, and it’s now offically a rescue and not a bailout, I am chastened.
The provisions of the bailout rescue remain essentially the same as in the previous House version, 250 billions to the Treasury Secretary for use as he determines, there are audit and oversite provisions, but he’s the man. The President gets a cool 100 billion to toss into the game as he deems appropriate and the Congress holds the remaining 350 billion for further bickering, hyperbole and general political footballing.
The Senate did add to the original plan:
The Senate version would make one significant change to the earlier financial-rescue package. It would more than double the insurance that the Federal Deposit Insurance Corp. provides on customer deposits to $250,000 from the current $100,000. The higher amount would apply for one year.
Emphasis added (I had not seen the time limit previously and am not clear on the impact.)
The differences between the Senate and House approach to the bailout rescue appear in the second part of what was approved last night, the tax extenders. Separate from the original House legislation, the Senate bill contains an energy section, called the Energy Improvement and Extension Act of 2008. It offers tax credits for energy based investments, such as coal gasification, carbon sequestration and bio-fuels and extends the tax credit of $2,500 to plug-in electric hybrid vehicles.
The second part of that legislation included changes to the tax code. This portion of the program, it appears, caused some controversy, which centered on the AMT (alternative minimum tax). The AMT comes in two flavors, one for individuals and one for businesses. Some who I read yesterday were insistent that there should be no further tax breaks for businesses. They either held against any tax breaks for businesses (or didn’t understand that AMT also applies to businesses), don’t believe AMT should be tacked on at all or felt the individual taxpayer wasn’t sufficiently protected and/or relieved. Some felt the addition of tax provisions was entirely inappropriate, AMT not withstanding.
Onward to the house goes H.R. 1424 to be voted on Friday. Will the Blue Dogs overlook the unfunded mandate of AMT, will the conservatives relent on their market principals, will the progressives find a common good in the bailout rescue? Stay tuned.
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