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WASHINGTON -- Despite all the constraints Congress supposedly wrapped around him, Treasury Secretary Henry M. Paulson is about to become the most powerful mortgage financier of the modern era -- most likely of any era.
Buried beneath the 100-plus pages of detail that Paulson's financial rescue plan has picked up during its 10-day journey from a Bush administration wish list to a bipartisan congressional compromise is the striking fact that the Treasury secretary got almost everything he sought -- an eventual $700 billion and the authority to spend it largely as he sees fit.
Under terms of the compromise announced Sunday, any firm selling troubled assets to the government would have to give Washington the right to take an ownership stake in the firm -- a more sweeping requirement than had been expected.
For example, while Democratic lawmakers declared that the final bill would ban companies selling troubled assets to the government from giving their executives multimillion-dollar salaries and "golden parachute" severance packages, Treasury officials briefing reporters on background late Sunday said the actual provisions were extraordinarily narrow.
The ban would generally apply only to severance packages, not salaries, and then only to packages negotiated in the future, not ones already in place. In addition, the bans would only affect companies that sell large blocks of assets to Washington, and only when the executive is fired or the company had gone bust.
They talk about how they will prevent golden parachutes. It says NOTHING about what these executives and fat cats will make in SALARY. According to Rep. Brad Sherman of California, these top managers will continue to receive million-dollar-a-month paychecks under this new bill. There is no direct ownership given to the American people for the money being handed over. Foreign banks and investors will be allowed to receive billion-dollar handouts. A large chunk of this $700 billion is going to be given directly to Chinese and Middle Eastern banks. There is NO guarantee of ever seeing that money again.