Business and Economy: Congress reaches tentative bailout deal
Story by Chris Graham
The House and Senate banking committees have reached an agreement on the framework for legislation authorizing a $700 billion Wall Street bailout.
The framework includes provisions for improved oversight of the program proposed by the Bush administration and a strategy for phasing in the second half of the $700 billion investment in stages after giving the Treasury Department basically free rein over the first $350 billion.
Companies that would benefit from the government purchase of securities would be expected to limit pay and severance packages for executives. Community banks would get a boost from another provision that would offer billions in tax breaks to account for their stock losses from the government takeover of lending giants Fannie Mae and Freddie Mac.
“We think we have fundamental agreement on a set of principles,” Senate Banking Committee chair Chris Dodd, D-Conn., said today. “We’re very confident we can act expeditiously, and we’ve done a good job arriving at that kind of consensus,” Dodd said.