Democrats Seek CEO Pay Limits, Help for Homeowners in Bailout Bill

Naturally, adding provisions is precisely what the Democrats are planning to do. A veto by Bush would not be looked on kindly by the American public; while the bailout itself is a provocative item, angering many citizens, it seems that many now believe the bailout is inevitable.

Looking at the provisions the Senate wants to add, it seems none of them are outside the "common sense test" that might have prevented this catastrophe in the first place.

For example, on Sunday, Senate Democrats said any bailout must include greater legislative oversight of the Treasury Department, more direct assistance for homeowners and limits on the pay of top executives. Seeing as how the firms would essentially owned by the government, and through it, the public, there seems to be no reason to not enforce item #3: why should a CEO take home $10 - 20 million a year when his company floundered and was bailed out?

On Monday, the Associated Press received a draft of the plan, and the measure would end the program at the end of 2009, rather than a two-year initiative as the Bush administration has asked for.

At the same time, Treasury Secretary Henry Paulson appeared on many Sunday talk shows, urging Congress to approve a “clean” plan free of extra programs. Bush emphasized that as well.

“Obviously, there will be differences over some details, and we will have to work through them. It is not easy to write a bill of this magnitude in a timely manner. It would not be understandable if members of Congress sought to use this emergency legislation to pass unrelated provisions, or to insist on provisions that would undermine the effectiveness of the plan. I appreciate members of Congress in both parties resisting the urge to do so.”

House Speaker Nancy Pelosi said in a statement on Sunday:

“We will simply not hand over a $700 billion blank check to Wall Street and hope for a better outcome. Democrats believe a responsible solution should include independent oversight, protections for homeowners and constraints on excessive compensation.”

But don't think the GOP will rubber stamp a measure for Bush. They have already indicated that they would want specific protections for taxpayers, including a requirement that any profits from the program be returned to the Treasury Department.

Finally, the end of the investment bank? Both Morgan Stanley and Goldman Sachs asked for and received approval to change their status to bank holding companies, from investment banks. This will enable them to set up commercial banks, which could add cash to their coffers, and help them weather the storm. It will also, however, increase the number of government regulations they must face.