Ambinder reports:
House Democrats who voted against the bailout are throwing a new bill into the mix. A diverse lot of lawmakers led by Rep. Pete DeFazio want to give the Federal Deposit Insurance Corp. more latitude to deal with bank failures, just as the FDIC efficiently negotiated the takeovers of Washington Mutual and Wachovia.Open Left has more details:
It would also suspend "fair value accounting," which could, in theory, stabilize prices and impose a securities tax equal to one fourth of one percent of profits.
DeFazio believes that the Paulson/Bush proposal is based on a flawed premise: if the American taxpayers spend $700 billion to buy Wall Street's toxic assets - a plan pundits are calling "trash for cash" - it will create liquidity in our financial markets and will somehow trickle-down to Main Street. DeFazio's plan is not in any way based on the Paulson/Bush plan. Instead of throwing taxpayer dollars at the program and crossing our fingers that the plan work, the measure will direct the Administration to take five simple steps, suggested by noted economist and former head of the FDIC, William Isaac, to re-regulate the markets and move America towards a healthy financial future.
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