Key provisions of the $US700 billion ($880 billion) financial industry bailout and sweeteners added by the Senate to attract votes from constituencies.
The underlying legislation would:
- Authorise $US700 billion for the government to purchase troubled assets and buy equity in distressed financial firms.
- Require the Treasury Department to make rules to prevent excessive compensation for executives whose companies benefit from the rescue, and cap deductibility of executives' pay packages at $US500,000 for firms that get $US300 million or more from the program.
- Establish an oversight board for the program, a special investigator general to monitor it and regular government audits.
- Require that the president establish a plan to recoup the cost from the financial industry if, after five years, there are any losses.
- Phase in the money for buying troubled assets, with $US250 billion available immediately, $US100 billion to be released if the Treasury secretary certifies it is needed, and the last $US350 billion available with another certification, but subject to a congressional vote.
Among the sweeteners added are those that would:
- Provide business tax breaks, including for production of, investment in, and use of renewable fuels.
- Increase personal credits against the AMT, shielding more than 20 million taxpayers from the tax.
- Grant tax relief to victims of natural disasters in the Midwest and elsewhere.
- Extend through 2011 a program that funds rural schools and local governments that have low property-tax bases because they lie within or are adjacent to federal lands.
- Extend until end of 2009 the deduction for state and local general sales taxes.
- Extend until end of 2009 individual tax breaks, including deductions for higher education costs and teachers' personal expenses.
- Increase, from $US100,000 to $US250,000, the limit on federal bank deposit insurance. The limit would revert to $US100,000 at the end of 2009 unless extended by Congress.
AP
