VIDEO: Progressive Caucus Offers New Bailout Bill (With Draft Bill Text)

[Blue State Bandit]

Go to http://c-span.org/VideoArchives.asp?CatCodePairs=,&ArchiveDays=100&Page=1">C-SPAN Archives and click on "House Democrats Press Conference on Alternative Financial Intervention Plan".

The House Progressive Caucus, including Peter DiFazio (D-Org), and Marcy Kaptur (D-Oh), held a presser today to offer an alternative bill to address the financial crisis.

It sounds like the progressives are now making their move. And concidering the reactions of many on both sides of the isle, they believe that they could get bi-partisan support from the young house republicans that so disliked the Paulson/Bush bill.

More at http://www.dailykos.com/story/2008/9/30/141113/931/593/615703">Daily Kos and the bill is posted on http://www.thenation.com/blogs/jstreet/366574/house_progressives_propose_bailout_alternative">The Nation.

No BAILOUTS Act
Bringing Accounting, Increased Liquidity, Oversight and Upholding Taxpayer Security

1)Require the Securities and Exchange Commission (SEC) to require an economic value standard to measure the capital of financial institutions.

This bill will require SEC to implement a rule to suspend the application of fair value accounting standards to financial institutions, which marks assets to the market value, no matter the conditions of the market. When no meaningful market exists, as is the current market for mortgage backed securities, this standard requires institutions to value assets at fire-sale prices. This creates a capital shortfall on paper. Using the economic value standard as bank examines have traditionally done will immediately correct the capital shortfalls experienced by many institutions.

2)Require the Securities and Exchange Commission to restricting naked short sells permanently.

This bill will require SEC to implement a rule that blocks naked selling, selling a stock short without first borrowing the shares or ensuring the shares can be borrowed. Such practices many times harm the companies represented in the sales and hurt their efforts to raise capital. There is no economic value produced by naked short sales, but significant negative effects.

3)Require the Securities and Exchange Commission to restore the up-tick rule permanently.

This bill will require SEC to implement a rule that blocks short sales without an up-tick in the market. On September 19, 2008, the SEC approved a temporary pause of short selling in financial companies "to protect the integrity and quality of the securities market and strengthen investor confidence." This rule prevents market crashes brought on by irrational short term market behavior.

4)"Net Worth Certificate Program"

This bill will require FDIC to implement a net worth certificate program. The FDIC would determine banks with short-term capital needs and the ability to financially recover in the foreseeable future. For those entities that qualify, the FDIC should purchase net worth certificates in these institutions. In exchange, these institutions issue promissory notes to repay the FDIC, counting the amount "borrowed" as capital on their balance sheets. This exchange provides short term capital, with not cash outlay. Interest rates on the certificates and the FDIC notes should be identical so no subsidy is necessary.
Participating banks must be subject to strict oversight by the FDIC including oversight of top executive compensation and if necessary the removal of poor management. Financial records and business plans should be subject to scrutiny while participating in the program.
In 1982, Congress approved a program, known as the Net Worth Certificate Program, that allowed banks and thrifts to apply for immediate capital assistance. From 1982 to 1993, banks with total assets of $40 billion participated in the program. The majority of these banks, 75%, required no further assistance beyond the certificate program.

5)Increase the FDIC Insurance limit from $100,000 to $250,000.

The bill will require the FDIC raise its limit to provide depositors confidence that their money is safe and help eliminate runs on banks which are destabilizing to the industry.

[loudsue]

1. That's more like it, and perfectly reasonable!!

That's why congress will probably have nothing to do with it. It won't make anybody filthy rich at everybody else's expense!

[Blue State Bandit]

2. On Lou Dobbs now.

Wow. He has a redeming quality!

[Blue State Bandit]

3. DiFazio recommends flooding the Capitol phone system.

Dobbs will put up the numbers. As venomous as Dobbs is towards Obama, I think this would be a great thing for him to do.

I just hope that Obama and the Senate Dems get the message before sending the original bill to the floor.

[LiberalAndProud]

4. It's a good bill.

Change your subject line to VIDEO: Progressive Caucus Offers New Stabilization Bill (With Draft Bill Text) and you've got yourself a winner here.

[Blue State Bandit]

5. Edit period over. I get your point though.