Emergency Economic Stabilization Act of 2008

- The EESA was introduced in the U.S. House of Representatives on September 29, 2008MarketWatch: Bailout bill unveiled, heads to House
- The House initially rejected the bill
- Senate approved different version of the bill on October 1, 2008
- House approved Senate version of bill on October 3, 2008
- President George W. Bush signed bill on October 3, 2008
- Authority to purchase assets would end on December 31, 2009Chicago Sun Times: Bailout bill "EESA of 2008" searchable summary.
- U.S. Treasury Department spending $250 billion on largest bank investment plan since the Great DepressionCNN Money: Banks Surge on $250B investment plan ABC News: U.S. Will Invest $250B to Bail Out Banks (October 14, 2008)
- Money part of the $700 billion bailout plan

On October 10, 2008, Treasury Secretary Henry Paulson announced that the government would immediately exercise a provision of the $700 billion Economic Stabilization Act allowing it to directly purchase stock in financial institutions.MSNBC: U.S. will buy stock in banks, Paulson says (October 10, 2008)
The Emergency Economic Stabilization Act of 2008 (EESA) is the final name of the bailout bill drafted by Congress and based on the budget developed by the White House. The legislation establishes a Troubled Asset Relief Program (TARP), and an Office of Financial Stability within the Treasury Department. The core of the act is to provide the Secretary of the Treasury with funds to purchase troubled mortgage and other assets from financial institutions.Politico: McCain decries bailout earmarks
December 12, 2008: The Bush Administration is in support of using the $700 billion financial markets emergency fund in order to keep General Motors and Chrysler from bankruptcy. This comes after the Senate rejected a $14 billion cash injection that would enable the automakers to meet short-term cash needs.CNNMoney.com: GM, Chrysler Face Immediate... (December 12, 2008)
History

The House rejected the bill on September 29 by a vote of 228 to 205. On October 1, the Senate approved a revised version of the bill, with provisions for consumer protection, as well as a number of additions that have been described by critics as "pork."CNN Money: Bailout Plan Rejected (September 29, 2008) Politico: McCain decries bailout earmarks The House approved the revised bill on Friday, October 3 and President George W. Bush signed it the same day.MSNBC: Let's do the numbers on the House re-vote(October 2, 2008)
Main Provisions
1. Provides up to $700 billion for the Secretary of the Treasury to buy mortgages and other assetsMarket Watch: Text of economic rescue bill official summary
2. Raises the American debt ceiling from $10 trillion to $11.3 trillionChicago Sun Times: Bailout bill "Emergency Economic Stabilization Act of 2008" searchable summary.
3. Establishes a program to allow companies to insure those assetsMarket Watch: Text of economic rescue bill official summary
Foreclosure Mitigation
1. The Treasury Department must modify existing troubled loans wherever possible.Market Watch: Text of economic rescue bill official summary
2. Mortgages owned by other Federal agencies must also modify troubled loans where possible.Market Watch: Text of economic rescue bill official summary
3. Expands eligibility and available tools of the existing HOPE for Homeowners programMarket Watch: Text of economic rescue bill official summary
Taxpayer Protection
1. Companies that sell some of their bad assets must provide warrants to ensure that taxpayers will benefit from any future growthMarket Watch: Text of economic rescue bill official summary
2. Requires the President to submit legislation to cover any lossesMarket Watch: Text of economic rescue bill official summary
Preventing Windfalls for Executives
1. Companies who choose to participate will lose certain tax benefits and, in some cases, must limit executive pay.Market Watch: Text of economic rescue bill official summary
2. Companies who choose to participate must limit 'golden parachutes' and return unearned bonusesMarket Watch: Text of economic rescue bill official summary
Oversight and Transparency
1. The Secretary must publicly disclose any details of any transaction under the act within two business days after the transaction.Chicago Sun Times: Bailout bill "Emergency Economic Stabilization Act of 2008" searchable summary.
2. The legislation establishes an oversight board, with a special inspector general to protect against waste, fraud and abuseMarket Watch: Text of economic rescue bill official summary
3. Funds to the Treasury will be given out in stages, requiring the President to certify that additional funds are needed, subject to Congressional approval.Chicago Sun Times: Bailout bill "Emergency Economic Stabilization Act of 2008" searchable summary.
4. The Comptroller General is required to conduct ongoing oversight and report to Congress every 60 days.Chicago Sun Times: Bailout bill "Emergency Economic Stabilization Act of 2008" searchable summary.
Senate Revisions
Provisions added in the Senate's revised version of the bill include the following:
1. $100 billion in tax cuts for businesses and the middle classLos Angeles Times: Senate approves bailout after revisions, 74-25 (October 2, 2008)
2. Increase in the amount of federal insurance for bank deposits from $100,000 to $250,000Los Angeles Times: Senate approves bailout after revisions, 74-25 (October 2, 2008)