An agreement has finally been made on the $700bn package to rescue the
The Government’s plan to buy all the bad debts held by American banks has been modified. The proposed bailout of $700bn (£383bn) has been halved to $350 (£191bn). But Congress has a veto power over future payments under the plan up to a total of $700bn.
The Government can buy troubled assets from pension plans, local governments and banks, particularly helping small community banks hurt by the mortgage crisis.
Congress is due to vote on the proposal today, followed by a Senate vote on Wednesday.
President George Bush said: "This bill provides the necessary tools and funding to help protect our economy against a system-wide breakdown."
Other parts of the deal include limits on 'excessive' pay and bonuses for executives who lose jobs at companies participating in the plan.
An oversight board is to be appointed by bipartisan leaders of Congress. The Congressional watchdog, the General Accounting Office at the US Treasury Department, will oversee the program and conduct audits. An independent Inspector General will monitor the Treasury Secretary's bailout decisions and there will be a judicial review of the Treasury Secretary's actions
The bail out will mean protection for some homeowners facing repossession - up to two million repossessions are possible in the next year. Government will have the power to renegotiate terms of mortgages to ease pressure on homeowners facing foreclosure.
Date: 28th, September, 2008
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