WASHINGTON – Key provisions of the $700 billion financial industry bailout and sweeteners added by the Senate to attract votes from constituencies.
The underlying legislation would:
—Authorize $700 billion for the government to purchase troubled assets and buy equity in distressed financial firms.
—Require the Treasury Department to make rules to prevent excessive compensation for executives whose companies benefit from the rescue, and cap deductibility of executives' pay packages at $500,000 for firms that get $300 million or more from the program.
—Establish an oversight board for the program, a special inspector general to monitor it and regular government audits.
—Require that the president establish a plan to recoup the cost from the financial industry if, after five years, there are any losses.
—Phase in the money for buying troubled assets, with $250 billion available immediately, $100 billion to be released if the president certifies it is needed, and the last $350 billion available with another certification, but subject to a congressional vote.
Among the sweeteners added are those that would:
—Provide business tax breaks, including for production of, investment in, and use of renewable fuels.
—Require group health plans that include mental health or addiction treatment to provide coverage for those conditions that is equitable to other medical coverage.
—Increase personal credits against the AMT, shielding more than 20 million taxpayers from the tax.
—Grant tax relief to victims of natural disasters in the Midwest and elsewhere.
—Extend through 2011 a program that funds rural schools and local governments that have low property-tax bases because they lie within or are adjacent to federal lands.
—Extend until end of 2009 the deduction for state and local general sales taxes.
—Extend until end of 2009 individual tax breaks, including deductions for higher education costs and teachers' personal expenses.
—Increase, from $100,000 to $250,000, the limit on federal bank deposit insurance.