With the troubles on Wall Street threatening families and businesses in western Wisconsin, Congress is working on an economic rescue plan. The goal of this plan is to take the poison out of the market, get it stabilized, and ensure the free flow of credit. Most importantly though, it guarantees that taxpayers will be reimbursed for their investment at the end of the day.

The bill being considered by Congress is very different than what the Bush Administration initially proposed. We worked hard to make changes that protect taxpayers, improve oversight, and increase transparency. We now have a bill that protects Main Street, not Wall Street; one that protects American taxpayers, not CEO salaries.

This is a rescue plan for the American economy. The reality is that without action, there is a good chance that Americans could lose everything they have worked so hard for. We cannot let that happen. This bill will allow us to continue moving forward

CRITICAL IMPROVEMENTS TO THE RESCUE PLAN

PROTECTION FOR TAXPAYERS, REQUIRING A PLAN TO BE REPAID IN FULL

• Requiring Congressional review after the first $350 billion is disbursed
• Gives taxpayers a share of the profits of participating companies, or puts taxpayers first in line to recover assets if a company fails
• Requires a President five years from now to submit a plan to ensure taxpayers are repaid in full, with Wall Street making up any difference
• Allows the government to also purchase troubled assets from pension plans, local governments, and small banks that serve low- and middle-income families

LIMITS ON EXCESSIVE COMPENSATION FOR CEOs AND EXECUTIVES

For companies publicly auctioning over $300 million:

• No multi-million dollar golden parachutes for top 5 executives after auction
• No tax deduction for executive compensation over $500,000
• Penalizes golden parachutes for CEOs who are fired or have run the company into the ground

For companies from which the government makes direct purchases:

• No multi-million dollar golden parachutes
• Limits CEO compensation that encourages unnecessary risk-taking
• Recovers bonuses paid to executives who promise gains that later turn out to be false or inaccurate

STRONG INDEPENDENT OVERSIGHT AND TRANSPARENCY

• Four separate independent oversight entities or processes to protect the taxpayer
• A strong oversight board appointed by bipartisan leaders of Congress
• GAO oversight and audits at Treasury to ensure strong controls; to prevent waste, fraud, and abuse
• An independent Inspector General to monitor the Treasury Secretary’s decisions
• Transparency—requiring posting of transactions online
• Meaningful judicial review of the Treasury Secretary’s actions

HELP TO PREVENT HOME FORECLOSURES CRIPPLING THE AMERICAN ECONOMY

• The government can work with loan servicers to change the terms of mortgages (reduce principal or interest rate, lengthen time to pay back the mortgage) to reduce the 2 million projected foreclosures in the next year
• Extends provision (enacted earlier in this Congress) to stop tax liability on mortgage foreclosures
• Helps save small businesses that need credit by aiding small community banks hurt by the mortgage crisis—allowing these banks to deduct losses from investments in Fannie Mae and Freddie Mac stocks

I hope you find this information helpful. If you should have further comments or questions, please contact me.