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Some components of the alternative plan
Components of the alternative plan including the following, according
to sources:
Require the Treasury Department to guarantee, at up to 100 percent,
bank losses resulting from failed mortgage-backed securities
originated prior to the plan's enactment. Such insurance, supporters
say, would provide immediate value to the securities and a foundation
for which they could then be sold. The Treasury Department would
finance that insurance by assessing a premium on outstanding mortgage-
backed securities.
Allow companies to carry back losses arising in tax years ending in
2007, 2008, or 2009 back five years, generating a tax refund and
immediate capital
Allow a "repatriation window" for profits earned by U.S. firms
overseas. Such repatriation amounts would not be taxed if invested in
distressed debt (as defined by Treasury) for at least one year.
Allow banks to treat losses on shares of preferred stock in Fannie Mae
and Freddie Mac as ordinary losses, not as capital losses
Suspend the capital gains tax rate for two years
Limit backing of high-risk loans by Fannie Mae and Freddie Mac
Schedule Fannie and Freddie for privatization
Suspend "mark-to-market" accounting until the SEC can issue new
guidelines that will allow firms to mark these assets to their true
economic value
Stabilize the dollar by repealing the Humphrey-Hawkins Full Employment
Act, which alternative bailout supporters say diverts the Federal
Reserve's attention from long-term price stability to short-term
economic growth
Require the Treasury to write rules prohibiting excessive compensation
or golden parachutes to executives of failed companies
Task the SEC with regular, annual audit reports of entities the
federal government has brought under conservatorship or now owns
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