US Senate Passes New Bail-out Plan
THE INDEPENDENT: President George Bush told Congress' lower house today that America's troubled economy "demands" that it followed the Senate's lead and passed a £385 billion rescue package.

Mr Bush said the Bill was "essential to the financial security of every American" after it was passed in the Senate by 74 votes to 25.

The Senate stepped in and added more than 100 billion dollars (£56.2bn) of sweeteners to the proposals after the Bill's surprise rejection by members of the House of Representatives shocked the world earlier this week.

The House will now get a second chance to vote on the amended proposals tomorrow before the Bill can be sent to the president to be signed into law.

Mr Bush applauded the Senate for its "strong bipartisan vote".

He praised those involved in the negotiations and said: "They worked across the aisle to make vital improvements to the rescue package I sent Congress last month - including an expansion of deposit insurance that will help protect the savings of American families and small businesses.

"The Bill the Senate passed is essential to the financial security of every American." US Senate Passes New Bail-out Plan >>> By Wesley Johnson, PA, in New York | October 2, 2008

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Breakthrough Reached in Negotiations on Bailout
THE NEW YORK TIMES: WASHINGTON — Congressional leaders and the Bush administration reached a tentative agreement early Sunday on what may become the largest financial bailout in American history, authorizing the Treasury to purchase $700 billion in troubled debt from ailing firms in an extraordinary intervention to prevent widespread economic collapse.

Officials said that Congressional staff members would work through the night to finalize the language of the agreement and draft a bill, and that the bill would be brought to the House floor for a vote on Monday.

The bill includes pay limits for some executives whose firms seek help, aides said. And it requires the government to use its new role as owner of distressed mortgage-backed securities to make more aggressive efforts to prevent home foreclosures.

In some cases, the government would receive an equity stake in companies that seek aid, allowing taxpayers to profit should the rescue plan work and the private firms flourish in the months and years ahead.

The White House also agreed to strict oversight of the program by a Congressional panel and conflict-of-interest rules for firms hired by the Treasury to help run the program. Breakthrough Reached in Negotiations on Bailout >>> By David M Herszenhorn and Carl Hulse | September 27, 2008

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Fears of Dollar Being Hit by Washington’s $700bn Bailout Plan
THE SUNDAY TIMES: THE US Treasury’s $700 billion (£380 billion) plan to bail out the banks could undermine the dollar, economists warn.

The plan, details of which were unveiled yesterday, will seek congressional approval to raise the total amount the US government can borrow from $10.6 trillion to $11.3 trillion.

It also gives Hank Paulson, the US Treasury secretary, immunity from legal challenge under the plan. The US Treasury will buy mortgage-related securities “from any financial institution having its headquarters in the United States”, draft legislation said. Securities issued before September 17 will be eligible for inclusion.

Word of the proposals created a mood of euphoria in financial markets on Friday. But analysts warned of the risks.

Tim Bond of Barclays Capital, while conceding that the rescue was necessary to avoid the risk of depression, said: “The volume of fresh government borrowing and the fast expansion of the Fed’s balance sheet are both negatives for the dollar, carrying a potential risk of increased inflation.”

Other economists also think that the dollar could be undermined. Kenneth Rogoff, former chief economist at the International Monetary Fund and now a professor at Harvard, said: “It is hard to believe that the dollar will continue to stand its ground as the crisis continues to deepen.” Fears of Dollar Being Hit by Washington’s $700bn Bailout Plan >>> By David Smith, Economics Editor | September 21, 2008

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