The Bailout Bill is Passed by the Senate

The U.S. Senate has now made it possible for the House of Representatives to vote on the bailout bill again. Many House members would rather avoid the subject, but can’t. The bailout bill is the largest proposed financial rescue plan in U.S. history. It has been a major topic of debate for the last several weeks. Millions of people are infuriated with the bill but lawmakers insist that it is absolutely necessary to ward off a deep, long financial recession.

The first time the bill reached the House of Representatives, it was just the plain old bill. House members were concerned about the number of taxes it would place on the taxpayer. This time around is a different story. The bill has been entirely revamped and loaded with tax cuts and other incentives. These incentives are meant to entice House members who voted against the original bill. The rejected first bill caused the stock market to face a record drop, something everyone is trying to avoid this time around.

The new bailout bill was passed in the Senate with a 74-25 vote. The House is expected to vote on the new package on Friday. Until then, lawmakers will hold their breath and hope fore the “best.” Today will be spend “sweet talking” those members who voted against the original bill. The problem is that the bailout bill was never in danger of being rejected in the Senate. So, just because the bill was approved in the Senate yesterday, doesn’t mean anything as far as the House of Representatives goes.

Here’s how the new plan works. It would allow the government to spend billions of dollars to buy bad mortgage loans and securities and other assets held by troubled banks and other financial institutions. If the plan works, it would help frozen credit to begin moving again. This would prevent a serious recession. The original bill was rejected because 133 House members feared that it wasn’t in the best interest of the tax payer. It allowed company CEOs to be rewarded even when their companies failed. CEOs would be rewarded while the taxpayer bailed them out.

This isn’t the case with the new bill. The newly approved bailout bill (by the Senate) does not allow these “golden parachutes” to continue. Instead, it implements “growth-oriented tax cuts.” The new bill seems to have a benefit for everyone. It provides help for rural schools for people in the West, disaster aid for people in the Midwest and South, and it extends the deductibles of state and local taxes to help states without income taxes (mainly Florida and Texas).

Lawmakers are trying to get the bill passed as quickly as possible in order to get our economy back on track. The financial crisis is already being felt by ordinary citizens like you and me. People are feeling the crunch in terms of hard to get credit and retirement accounts that really aren’t moving anywhere. Let’s hope that something can be done to get our economy rolling again.

This entry was posted on Thursday, October 2nd, 2008 at 4:11 pm and is filed under credit. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.