Treasury Secretary Henry Paulson and Congressional leaders worked late into the nights over the weekend and have finally reached a bipartisan agreement on the specifics of the bailout legislation. According to Senate Majority Leader Harry Reid, a real breakthrough didn’t come until 11:30 p.m. (EST) late Saturday night.
Secretary Paulson summed it up at a press conference following the late-night meeting when he told reporters, “I think we’re there.” The House began meeting on the new plan yesterday afternoon, and a formal vote is expected to come later today. Paulson said the Treasury Department has already begun taking the steps necessary to implement the new legislation as soon as it is signed.

The new deal makes the $700 billion available in phases. The first $250 billion will be immediately available to the Treasury Secretary, with the next $100 billion available following a report to Congress. The final $350 billion would become available only upon further Congressional action.
The new bailout package includes definitive checks and balances. It establishes a bipartisan oversight board, an inspector general to monitor Treasury decisions, and regular audits from the Government Accountability Office. The Treasury will also be required to post all transactions online for the public to see, and Treasury decisions would be subject to judicial review.
The agreement includes specific provisions to ensure taxpayers get their investment back. Taxpayers will receive an ownership stake in the companies assisted, with the opportunity to even turn a profit. Taxpayers will also be first in line to recover assets if a participating company fails.
As for foreclosure prevention measures, the legislation would allow the Treasury to work with homeowners whose mortgages are purchased by the federal government to refinance into a more affordable home loan. It also includes an extension of the tax holiday for homeowners who face foreclosure, as well as a tax break for community banks that held shares of Fannie Mae and Freddie Mac.
The new bailout plan also addresses executive pay for those institutions that receive assistance. Salaries, bonuses, and severance packages are all capped, ensuring executives at financial institutions don’t wind up benefiting while the federal government takes on added risks from their troubled assets.