Plan B of the Economic Bailout plan in the U.S. Senate

With Hank Paulson’s $700 million no-strings-attached proposal dead on the floor of the U.S. House of Representatives, Plan B has emerged from the Senate Republicans who have wanted the legislation to be of a more conservative nature. Committee members and leaders of the Senate working diligently over the past two days– since the defeat of the $700 billion House bill– have arrived at what they think will be passable legislation. Subsequently, the House will have to vote again if passage is achieved at the Senate level. In the mix of the new bill are, reportedly, tax breaks for businesses, a higher limit for FDIC deposit insurance guarantees, and alternative energy language. House Republicans had strongly opposed the initial bill, and their failure to embrace it, even after many aspects of their objections were included, were the reason for the bill’s failure in the House on Monday.

Drafted in the Senate, Plan B is designed to appease the Republicans in the House as well as other members who had expressed a high level of discomfort in Plan A. Many members of Congress publicly expressed concerns that including tax incentives into this type of emergency funding bill may complicate the bill significantly, and affect its ability to pass. In any event, the legislation is deemed controversial and may be subject to endless amendment proposals going forward.

Marketing Efforts

Members of both branches of Congress appeared on the morning news shows to express their opinions on the bill. Many members of Congress have had significant input from their constituent base during the last ten days on this issue. Their voices being heard, it is believed that Congress is determined to get some resolve and achievement on this emergency issue.

What’s In, What’s not

To date, no new comment or release of information directed towards making Wall Street institutions and banks contribute to recouping liabilities from bad mortgages and securities that have had a significant hand in creating the credit and financial crisis has been issued– despite the desires of the American public.

Limitations on the authority of Secretary of the Treasury Hank Paulson has also not been on the radar of the Senate, while tax credits for the production and use of renewable energy sources, like solar energy and wind power have been. Possible other inclusions originating in the House bill are an extension of the unemployment benefits, protection from foreclosure for individuals, and tax credits for low and medium income households.

A growing amount of pressure resulting from pressing daily evidence of the effects of the credit crisis on small and medium sized businesses has been mounting, influencing the actions of Congress. On the top of objectives that bill passage is expected to achieve is the restoration of confidence in credit markets which drive business in the country. While the highs and lows of the stock market has had its influence on Congress members, the ease of restraints in the credit markets is the number one priority to prevent a choking off of lending to the nation’s businesses. Reportedly, pressure is also mounting from constituents for Congress to take action to stop the extreme volatility in the markets as their investments have plummeted. While stiff opposition to a bailout of Wall Street is apparent, direct damage to the net worth of individuals has prompted a call for action.