The Senate stepped up to the plate Wednesday night and passed the rescue plan by a 74 to 25 vote. This vote now challenges members of the House who previously voted against a plan and now expected to vote again this Friday on the bailout.
Key features of the plan passed by the Senate are:
· $700 billion to buy up mostly mortgage-related distressed assets from financial institutions, with $250 billion immediately available
· Raise FDIC insurance for banks from $100,000 to $250,000
· Tax breaks and credits for both individuals and businesses including:
- Renewal of tax breaks for individuals that were about to expire
- Extension of renewable energy tax credits for businesses and individuals
- Delay of the Alternative Minimum Tax for another year
· Creation of two financial oversight committees
· Establishment of an insurance program by the U.S. Treasury to guarantee troubled assets
· Pay restraints for CEO's of institutions selling assets or buying insurance from the Government
In recent days, the world's economies have been facing volatile financial markets, increasing interest rates, and a severe liquidity crisis. What does that mean to us TODAY? Constraints on real estate loans to home and business owners, capped second mortgages and HELOCS by banks, reduced credit card limits, reduction in loans to businesses for the purchase of inventories and payment of payrolls, fewer student loans and on and on...
Talking to my clients, friends and business associates reveals these events are already impacting their lives this week. This crisis needs to be slowed down and reversed before it becomes more severe. Let's swallow the bitter pill, create confidence, and start the road to financial recovery.
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