Sep 24, 2008 10:59 pm US/Central
Reality Check: Government's Bailout Plan
(WCCO)
Despite President Bush's plea, lawmakers say the bank bailout plan is anything but perfect. One big concern is the multi-million dollar paydays that top Wall Street executives could still enjoy.
So how much would they get, and what happens if a plan doesn't pass?
Most people agree that the jaw-dropping bailout package is unfair, and frustrated taxpayers feel a little like Clark Griswold in "National Lampoon's Vacation". It's TRUE.
Main Street workers are picking up the tab for Wall Street losers; companies like Lehman Brothers, Bear Stearns, AIG, Fannie Mae and Freddie Mac. All the while, homeowners may not be rescued.
"This troubled asset purchase program, on its own, is the single most effective thing we can do to help homeowners, the American people and to stimulate our economy," said U.S. Treasury Secretary Henry Paulson.
But IN FACT...
Bailing out financial institutions -- "cash for trash" -- is not the same as helping struggling homeowners facing foreclosure. Unless the bailout package includes specific language to stop foreclosures there could be many more.
Members of Congress also want a bailout ban on golden parachutes, to stop Wall Street executives from gliding to a comfortable landing.
"We now have to pay for the greed and recklessness of those who should have far known better," said Sen. Chuck Schumer, D-New York.
The REALITY IS...
Executives at the top of some of the failed companies are losing millions in the economic crash but some still have millions left in stock option payouts.
Here are remaining stock options for some of the top executives:
Merrill Lynch: $16 million.
Lehman Brothers: $2.3 million.
AIG: $49.6 million
Fannie Mae: $476,000
Freddie Mac: $130,000
That's what angry lawmakers want to take away.
"What they have sent to us is not acceptable," said Sen. Chris Dodd, D-Conn. "This is not going to work."
Here's what you NEED TO KNOW.
While many agree the bailout is unfair. It is terrible, but the alternative is much worse. Recession, joblessness, foreclosures, evaporating retirement funds and no credit.
That's Reality Check.
To check the resources for the Reality Check click on the links below:
New York Times: The Shareholders At The Top
Washington Times: Congress Balks At Bernanke's Dire Warnings
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