The Senate passed a re-vamped version of the $700 billion bailout proposal last night. The next nut to crack, winning over the hearts and minds of at least 13 of the 228 House Democrats and Republicans who opposed the first version.
The new-and-improved bailout proposal includes “increasing the FDIC deposit insurance limit to $250,000 through Dec. 31, 2009, reiterating the authority of securities regulators to suspend asset-valuing rules and authorizing the government’s purchase of troubled assets with a $149 billion package of tax breaks. This would spare 24 million households from a $62 billion alternative minimum tax and extend $17 billion in benefits to companies that produce alternative energy,” Bloomberg reports.
One of the most unusual and certainly most interesting tax break includes $0.39 excise tax for children’s wooden practice arrows. That one’s a head-shaker.
The question remains, will the new additions be enough to woo even the most skeptical minds of the House of Representatives? We’ll have to wait until they vote tomorrow to find out.
Below is another reason why I think the House should respond the same way to this new mutation of the “Rescue” bill (note they have stopped using the word Bailout). It is becoming a means for everyone to attach their pet cause and undoubtedly loads of pork from both sides of the aisle. Regardless of how you feel about Mental Health Parity, that’s not the point. Now it’s part of a bill that there may be tons of political fallout if a congressperson votes against it. We simply cannot trust these guys, ANY of them, with any more rope to hang us. Just wait till after this bill passes to much fanfare and gladhanding when we find out what has been attached to it. We will probably all lose our cookies when we do.
What is especially infuriating is that this problem goes away in major part by the following and cost around $50 Billion:
1) relaxing the Mark to Market accounting rules for two years
2) insuring the sub-priume loans in an FHA like way which will make them immediately marketable all over the world , don’t buy them and saddle the taxpayer with it
3) recasting all loans that are 3 or more months behind to a 6% fixed rate and deleting all late fees and penalties and deleting early pay off penalties so that those who have ANY chance of paying their mortgage can do so and encourage standard refi’s
4) Cancelling all severance plans and golden parachutes by the execs at any firm that takes advantage of the plan. This won’t signifciantly impact the total cost, but it sure will feel good.
The $770 Billion Earmark That Revived the Mental Health Parity Bill
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By Steven A. Morelli, Senior Editor
SOURCE: InsuranceNewsNet, Inc.
October 2, 2008
If you ever felt bloated beyond belief, like after the holidays, think of poor HR 1424 .
It started out life last year as the Paul Wellstone Mental Health and Addiction Equity Act of 2007. It was a humble five-section bill that primarily sought to put mental health and substance abuse coverage on parity with other parts of group health coverage, such as surgery. Then this year, it grew a fairly sizeable appendage called the Genetic Information Nondiscrimination Act of 2008. The aim of that is to prohibit group health plans from adjusting premium or contribution amounts on the basis of genetic information. That passed the House but faced much opposition from insurers and President Bush.
The Genetic Information Nondiscrimination Act was removed from HR 1424, named HR 493 and became law to much fanfare.
In the meantime, HR 1424 hung around the Senate until it grew an enormous amendment called the Emergency Economic Stabilization Act, which passed on Wednesday. The bill and its $770 billion earmark have waddled to the other side of Congress to be considered by the House, supposedly on Friday. It must pass without further amendments or it goes back to the Senate.
If it passes, health insurers will find themselves with a substantial new obligation. The law would not allow any separate cost-sharing for mental health or substance abuse costs that is any different from other health coverage. So for some the bitter bailout pill became a tad more bitter.
Steve welcomes comment at [email protected]