Home  News National News Bailout bill: What’s in it for you?
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Bailout bill: What’s in it for you? |
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Written by Dr. Garth A. Rose
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Monday, 06 October 2008 |
The news has been saturated with talks about the Wall Street bailout bill and the effects it might have on the economy and individuals alike. Following the shock to the nation when the $700 billion financial bail-out bill was rejected by the House of Representative by 228 to 205 votes, lawmakers rushed to make further amendments to the bill and it was approved by the Senate by 74 to 25 votes Wednesday night.
The “sweeteners,” or amendments made to the bill include the addition of $110 billion in tax breaks for businesses and the middle class, an amendment that should be popular with small businesses. Another amendment that should reassure small businesses (and individuals) is that to raise the cap on federal deposit insurance from $100,000 to $250,000 making their money safer in the case their banks collapsed. Other amendments eliminated the unpopular alternative minimum tax that impacted some 20 million middle-income Americans; another provides $8 billion for people affected by hurricanes and other natural disasters in the Midwest, Texas, and Louisiana; and extend the deductibility of state and local taxes for people in states without income taxes which should help Florida residents.
However, the core of the bill remains, giving authority to the government to spend billions of dollars to bail out financial institutions by buying bad mortgage-related securities and other devalued assets held by them. By alleviating the pressure borne by these financial institutions this would allow credit that has been frozen because of the existing crisis to again flow from banks. A decision by the Securities and Exchange Commission on Tuesday could allow the government to sell the devalued assets they would acquire from the financial institutions at higher prices, reducing the cost of the bailout funding.
Ros-Lehtinen (R), a South Florida representative who opposed the bill, was reported as saying that the bill was too high a price tag, and did not address the needs of the working class. Mario Diaz-Balart (R), also in opposition, said approving the bill meant having taxpayers footing a bill to bail out Wall Street for its reckless and irresponsible behavior.
Of those favoring the bill, Kendrick Meek (D) said that not supporting the bill could affect Floridians living on fixed incomes and dependent upon pension and retirement income. While Alcee Hastings said allowing the U.S. financial markets to fail would be catastrophic, and that it is not Wall Street executives who would suffer in a complete financial collapse, but rather the average American citizen like those living in his Congressional district.
Immediately after the bill was defeated in the House on Monday, the U.S. stock market plunged rapidly, DOW Index falling by a historic 777 points.
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