New bailout: Senate to vote this evening

The Senate is expected to vote on the bailout this evening, with Obama, Biden, and McCain planning to show up to cast their ballots. After the House failed to pass the bailout on Monday, Congressional leaders began to tweak the plan to try and make it more palatable to GOP skeptics. The new provisions are:

  • Increasing the FDIC insurance deposit max to $250,000 from $100,00 (relieving some of the pressures put on banks by recent withdraw runs)
  • Making the insurance program for mortgage-backed securities optional (financial institutions will pay premiums, which will add value to their MBSes)
  • Additionally, the Senate attached these provisions, measures the House has already passed as separate bills:
  • A two-year extension of the research and development tax credit for new energy (to spur on innovation, see the end of my blog post about this yesterday)
  • A one-year “patch” to the alternative minimum tax (helping millions of Americans from stumbling into the IRS trap set up for tax dodgers)
  • Tax breaks for those impacted by natural disasters
  • A law mandating parity for mental health insurance benefits
  • In case you missed it, here is a detailed explanation posted on Out of Control of the bailout bill as it was voted down in the House (and the GOP alternative plan): Here is a more watered down explanation of the bailout from Reason finance analyst Anthony Randazzo published in Patrol Magazine: