House republicans to push separate bailout bill - Suspend capital gains tax, repeal Humphrey Hawkins

[bigtree]

A group of House Republicans is cobbling together a proposal to stabilize financial markets that can serve as an alternative to the plan proposed by Treasury Secretary Henry Paulson, legislative sources have told CNBC.


Components of the alternative plan including the following, according to sources:

* Require the Treasury Department to guarantee, at up to 100 percent, bank losses resulting from failed mortgage-backed securities originated prior to the plan's enactment. Such insurance, supporters say, would provide immediate value to the securities and a foundation for which they could then be sold. The Treasury Department would finance that insurance by assessing a premium on outstanding mortgage-backed securities.
* Allow companies to carry back losses arising in tax years ending in 2007, 2008, or 2009 back five years, generating a tax refund and immediate capital
* Allow a "repatriation window" for profits earned by U.S. firms overseas. Such repatriation amounts would not be taxed if invested in distressed debt (as defined by Treasury) for at least one year.
* Allow banks to treat losses on shares of preferred stock in Fannie Mae and Freddie Mac as ordinary losses, not as capital losses
* Suspend the capital gains tax rate for two years
* Limit backing of high-risk loans by Fannie Mae and Freddie Mac
* Schedule Fannie and Freddie for privatization
* Suspend "mark-to-market" accounting until the SEC can issue new guidelines that will allow firms to mark these assets to their true economic value
* Stabilize the dollar by repealing the Humphrey-Hawkins Full Employment Act, which alternative bailout supporters say diverts the Federal Reserve's attention from long-term price stability to short-term economic growth
* Require the Treasury to write rules prohibiting excessive compensation or golden parachutes to executives of failed companies
* Task the SEC with regular, annual audit reports of entities the federal government has brought under conservatorship or now owns


read more: http://www.cnbc.com/id/26962690

[sharesunited]

1. Is the defeat of this bill supposed to embarrass Democrats in turnabout fashion?

[bigtree]

3. It's a ploy to get their benefactors' capital gains tax suspended

. . . with the hope of making it a permanent repeal; among other things

[BrklynLiberal]

2. Sounds like crap to me.

[bigtree]

4. of course it's crap

That's what they've been holding out for. The dynamic now favors appeasing them to get their votes for passage, unless we manage a dozen or so more Democrats.

[sixmile]

5. Who will have the balls to tell the truth about taxes?

Tax cuts will not stimulate this economy if only given to the wealthy. They haven't worked yet in case you haven't been paying attention.
Taxes are not the reason a person decides to go into business; the opportunity to make money is, not tax rates.
A middle class tax, on the other hand, works from the bottom up and is preferable to stimulate a slowing economy.

[bigtree]

6. the repeal of capital gains taxes has been the republican holy grail since Reagan

It's also been the line in the dirt our party has drawn that we'd better preserve if our opposition is to mean anything at all.

[sixmile]

10. If I were a betting man

I'd say that line will be crossed and ground given.

[bigtree]

12. stacked deck

[Historic NY]

7. Repealing Humprey-Hawkins will allow them to run further amuck...

it would take away any goals or objectives to our economic policy...run wild.

[bigtree]

8. oh, thank god

I though there wouldn't be a soul here who was concerned about HH. You are absolutely right. The repeal would have the effect of masking the types of economic trends like this year's sudden reduction in available credit.

[eowyn_of_rohan]

9. HA! So it really ISN'T about helping us little people on Main Street?

Aww. And I thought they had turned away from their evil ways.

[whosinpower]

11. They insult you!

What a joke. Why the heck should the treasury insure every single bank loss up to 100% That is crazy, irresponsible, reckless. Those securities are crap. No one wants them FOR A REASON. They are overvalued.

It is a total giveaway. If you are not insulted - you have not been paying attention.

There should not be a single AYE in the vote. This is abhorrent. And in true GOP fashion - this does absolutely nothing for the real economic pressures that face every American. Time for Dems to dig in.

[bigtree]

13. We used to be able to count on the House Dems in Tip's day

. . .to stand in the way of the Senate. Now it looks like they're hiding behind them.

[PA Democrat]

14. Wow. They have a strange way of showing their concern for "Main Street".

Repeal taxes for corporations and the wealthy, deregulate, privatize. Gee, what could possibly go wrong?:banghead:

[BearSquirrel2]

15. From a shitty bill to ...

Damn, I knew there was a punchline to the Congressional Republican's nay vote. I'm really glad they decided to give up their position of advantage on the Democrats by proposing something even worse.

[bigtree]

16. who knows how the House Democrats will deal with this

. . . in the face of the expected Senate capitulations?