Below is a link to the 110-page legislation that will more than likely get passed and signed by as early as Wednesday. House Speaker Pelosi states that this bill is not a bailout, but a buy-in as it prevents taxpayers from having to carry the burden of stabilizing our economy. To summarize, the bailout is a compromise on the original 3-page document, and offers staged disbursements ($250 billion will be immediately disbursed to the Treasury to purchase bad mortgages once the bill gets passed and signed by the President). The proposed bill will also place many salary restrictions to the top executives of companies seeking financial assistance through the bailout–executive pay will not be deducted for executives who earn more than $500,000 for companies selling more than $300 million in assets in the government auction, plus new executives will have to forfeit any type of golden parachute while their company seeks financial assistance; however, this would not apply to current executives.
Since the government is in essence becoming one: a shareholder in many troubled financial companies and two owning risky mortgages, the legislation offers reduced risk to taxpayers. For example, because the government will essentially own many mortgages or mortgage back securities, the government will be able to modify loans and/ or extend the length of the loan to assist homeowners, a major plus to many who are or will potentially default on their loans.
Feel free to review on the legislation here:
Emergency Economic Stabilization Act of 2008