Nov 17, 2008
Here are the highlights of the Senate's version of a bailout bill to help troubled Detroit automakers GM, Ford and Chrysler. It was introduced this afternoon by Speaker Harry Reid (D-Nev.).
The House did not meet today but Speaker Nancy Pelosi (D-Calif.) met with Treasury Secretary Hank Paulson and Fed Chairman Ben Bernanke, presumably to persuade them to allow money from the $700 billion bailout/rescue plan to be spent on Detroit, a course of action the administration has resisted.
Highlights of the Senate plan include:
-- $25 billion in 10-year low-interest loans, charging 5 percent interest for the first five years and 9 percent for the remainder of the loan terms.
-- Parts-makers as well as the Big Three would be eligible.
-- The money would come from the $700 billion rescue/bailout plan.
-- A prohibition on bonuses for automaker employees making more than $250,000 per year.
-- Fast processing: Eligibility for loans will be determined within 15 days of application.
-- Fast turnaround: The loans would be distributed within seven days of approval.
-- "Clawback" provision: Bonuses can be taken back by the government if executive statements are found to be inaccurate.
-- No golden parachutes of any sort.
-- Companies receiving these loans cannot pay dividends for the duration of the loan.
The Ticker - Senate's Version of Bailout Bill for Automakers - Economy Watch *