On Sunday night, Dodd began circulating a 44-page draft around Capitol Hill, hoping to convince lawmakers to make some significant changes to the rescue plan.

Sen. Dodd's plan would not allow the Treasury Department to purchase any assets "unless the Secretary receives contingent shares in the financial institution from which such assets are to be purchased equal in value to the purchase price of the assets to be purchased."

Translation: if the Fed is going to pony up so much cash for all these bad loans, it would want some ownership of the troubled companies.

Sen. Dodd's plan includes another lightning rod: limits on executive pay. According to the proposal, the bailout should include pay limitations on senior executives "determined to be appropriate in the public interest in light of the assistance being given to the entity."

The draft also recommends the creation of a special inspector general program and a separate emergency oversight board, which would include top officials from the Federal Reserve, Federal Deposit Insurance Corp., and Securities and Exchange Commission.

As of now, Treasury Secretary Henry Paulson has not suggested that the government take any shares of companies that sell distressed assets. And Republicans aren't likely to be warm to any formalized limits on executive pay.

On the House side, Dodd's counterpart, Financial Services Committee Chairman Barney Frank, is working on a separate plan that also includes limits on executive pay.

Who will win out? It's far too early to say and a lot could change in the next few days. Stay tuned.

categories: Politics

10:22 - September 22, 2008

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