$700 Billion bailout: 101

Congress has been working on granting President Bush’s request for $700 Billion for the economic crisis the United States have found themselves in. This bailout is being urged so an economic meltdown does not occur.

The $700 billion bailout package focuses on financial institutions lending again by letting the U.S. Treasury buy up their troubled assets, these assets are mainly tied to the housing market crash.

The House is schedule to vote today and the Senate will to follow Wednesday.

What the Bill consists of:

• Doling the money out: The $700 billion would be disbursed in stages, with $250 billion made available immediately for the Treasury's use.


• Protecting taxpayers: The ultimate cost to the taxpayer is not expected to be near the amount the Treasury invests in the program. That's because the government would buy assets that have underlying value.


• Stemming foreclosures: The bill calls for the government, as an owner of a large number of mortgage securities, to exert influence on loan servicers to modify more troubled loans.


• Limiting executive pay: Curbs would be placed on the compensation of executives at companies that sell mortgage assets to the Treasury.


• The Financial Stability Oversight Board would be charged with ensuring the policies implemented protect taxpayers and are in the economic interests of the United States.


• A congressional oversight panel would be charged with reviewing the state of financial markets, the regulatory system and the Treasury's use of its authority under the rescue plan.


• Insuring against losses: Treasury must establish an insurance program - with risk-based premiums paid by the industry - to guarantee companies' troubled assets, including mortgage-backed securities, purchased before March 14, 2008.

This all adds up to $700 Billion that the Treasury is using for this resuce plan.