CNBC legislative sources say that a group of House Republicans is formulating a proposal to stabilize financial markets that can serve as an alternative to the plan proposed by Treasury Secretary Henry Paulson. CNBC reports that the development of the alternative plan comes as members of the Senate consider voting on the original financial rescue plan as soon as Wednesday evening. The $700 billion rescue bill may be attached to a tax plan that included relief to taxpayers paying the alternative minimum tax, or AMT.
The plan appears to take a combination of approaches to address various economic issues within the larger issue of illiquidity. The alternative plan attempts to remove a number of restrictions from banks, provides guaranteed funds to banks for losses due to failed mortgage-backed securities originated prior to the plan's enactment, restricts high-risk loans by Fannie and Freddie, requires new SEC guidelines for marking assets and regular SEC audits, raise federal deposit insurance limits to 250k from 100k, and this is just for starters.
It is unclear whether or not GOP members can get legs under their plan before members of the senate vote on the Paulson plan again.
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