bobbyw24
10-01-2008, 07:39 AM
WASHINGTON: A group of Republicans are putting together an alternative
to the $ 700-billion rescue plan proposed by US Treasury Secretary Henry
Paulson, a media report said today.
The rejection of the bailout plan on Monday by the US House of
Representatives has made the group to press forward with its own plan,
news broadcaster CNBC quoting sources reported on its website.
The development of the alternative plan comes as members of the Senate
consider voting on the original financial rescue plan later today, the
report added.
According to sources, components of the alternative plan include a
guarantee from the US treasury of up to 100 per cent for bank losses
resulting from failed mortgage-backed securities originated prior to the
plan's enactment, the report said.
Such insurance would provide immediate value to the securities and a
foundation for which they could then be sold and the Treasury Department
would finance that insurance by assessing a premium on outstanding
mortgage-backed securities, it added.
The alternative plan also includes allowing companies to carry back
losses arising in tax years ending in 2007, 2008, or 2009, generating a
tax refund and immediate capital. While it also envisages allowing a
'repatriation window' for profits earned by US firms overseas. Such
repatriation amounts would not be taxed if invested in distressed debt
(as defined by Treasury) for at least one year, the report stated.
Besides, the Republicans in their alternative plan also propose to allow
banks to treat losses on shares of preferred stock in Fannie Mae and
Freddie Mac as ordinary losses, not as capital losses.
"The first thing I would do is say, Let's not call it a bailout. Let's
call it a rescue," McCain told CNN.
He said, "Americans are frightened right now", and the Arizona
Republican maintained and argued that political leaders must give them
an immediate solution and a longer-term approach to the problem.
Meanwhile, Obama has issued a statement saying that increasing the
federal deposit insurance would help small businesses and make the US
banking system more secure, besides restoring public confidence.
The Bush administration is frantically looking at ways in which the rude
shocks of the last few days could be minimised, essentially making the
point that continuing losses in Wall Street of close to trillion dollars
or more can not be sustained by the economy.
to the $ 700-billion rescue plan proposed by US Treasury Secretary Henry
Paulson, a media report said today.
The rejection of the bailout plan on Monday by the US House of
Representatives has made the group to press forward with its own plan,
news broadcaster CNBC quoting sources reported on its website.
The development of the alternative plan comes as members of the Senate
consider voting on the original financial rescue plan later today, the
report added.
According to sources, components of the alternative plan include a
guarantee from the US treasury of up to 100 per cent for bank losses
resulting from failed mortgage-backed securities originated prior to the
plan's enactment, the report said.
Such insurance would provide immediate value to the securities and a
foundation for which they could then be sold and the Treasury Department
would finance that insurance by assessing a premium on outstanding
mortgage-backed securities, it added.
The alternative plan also includes allowing companies to carry back
losses arising in tax years ending in 2007, 2008, or 2009, generating a
tax refund and immediate capital. While it also envisages allowing a
'repatriation window' for profits earned by US firms overseas. Such
repatriation amounts would not be taxed if invested in distressed debt
(as defined by Treasury) for at least one year, the report stated.
Besides, the Republicans in their alternative plan also propose to allow
banks to treat losses on shares of preferred stock in Fannie Mae and
Freddie Mac as ordinary losses, not as capital losses.
"The first thing I would do is say, Let's not call it a bailout. Let's
call it a rescue," McCain told CNN.
He said, "Americans are frightened right now", and the Arizona
Republican maintained and argued that political leaders must give them
an immediate solution and a longer-term approach to the problem.
Meanwhile, Obama has issued a statement saying that increasing the
federal deposit insurance would help small businesses and make the US
banking system more secure, besides restoring public confidence.
The Bush administration is frantically looking at ways in which the rude
shocks of the last few days could be minimised, essentially making the
point that continuing losses in Wall Street of close to trillion dollars
or more can not be sustained by the economy.