The Bush administration is asking Congress for $700 billion to buy up troubled mortgage-related assets from U.S. financial institutions. According to a draft obtained Saturday by The Associated Press, the proposal would:
• Give the treasury secretary broad authority to buy up to $700 billion in mortgage-related assets from any financial institution in the United States.
• Raise the $10.6 trillion statutory limit on the national debt to $11.3 trillion.
• Allow the treasury secretary to buy, hold and sell the assets in any way he sees fit. That includes the ability to go outside normal government contracting practices to hire private companies to manage them.
• Give the government power to designate financial institutions as financial agents of the government and require them to carry out any reasonable duties that entails.
• Require the government to report to congressional budget, tax-writing and financial services committees within three months of using the authority and every six months thereafter.
• Instruct the treasury secretary to consider both providing market stability and protecting taxpayers in using the bailout power.
• Expire two years after enactment.