President Bush Signs Financial Rescue Plan After House Passage
October 3, 2008
By a vote 263-171, on Oct. 3, 2008, the House of Representatives voted to concur with the Senate version of the financial rescue bill, the Emergency Economic Stabilization Act of 2008 (EESA). [Note: preceding link is to Senate bill on which House voted to concur October 3.] Subsequently, President George W. Bush immediately signed the legislation, providing for the biggest government intervention in the financial markets since the Great Depression.
The bill provides $700 billion to immediately restore liquidity and stability to the financial system by authorizing the U.S. Treasury Department to purchase troubled assets of financial institutions. The bill also raised the FDIC insurance limit to $250,000 per account.
President Bush expressed the importance of the bill, both to businesses and individuals: “With a smoother flow of credit, more businesses will be able to stock their shelves and meet their payrolls. More families will be able to get loans for cars and homes and college education[s]. More state and local governments will be able to fund basic services.”
The financial rescue plan also includes a 10-year, $153 billion energy- and tax-extender package that is partially offset by $42 billion in revenue-raising tax provisions.
Specifically, the bill renews retroactively the research and development tax credit and other business and individual tax incentives through 2009 that expired at the end of 2007. The bill also patches the Alternative Minimum Tax (AMT) by increasing the exemption amounts for individuals and couples. (Current law does not index the AMT to inflation, and the passage of this bill today prevents an additional 22 million taxpayers from becoming subject to the tax in 2009.)
The final bill also includes the same Senate-passed language in Section 132 and Section 133 of the Act regarding mark-to-market (fair value) accounting. See FEI summary of Sections 132, 133 of the EESA.
See also this Section-by-Section summary of EESA posted on the Senate and House websites.
Links to statements made upon passage of EESA by:
President George W. Bush
U.S. Treasury Secretary Henry M. Paulson
Federal Reserve Board Chairman Ben Bernanke
Speaker of the House, Rep. Nancy Pelosi
House Minority Leader, Rep. John Boehner
Prepared Oct. 3, 2008 by Cady North, Manager, Government Affairs, Financial Executives International (FEI). This summary does not represent FEI opinion unless specifically noted above.