What does the "Bailout bill" mean for you?

October 4, 2008 3:31:16 PM PDT
After voting down the so-called "bailout bill" on Monday, the House of Representatives passed it Friday by the decisive margin of 263 to 71. Dozens of lawmakers changed their vote and approved the $700 billion rescue of the financial industry.

President Bush quickly signed the bill into law, and hailed the tireless work and the bi-partisanship necessary to reach an agreement.

Wall Street was apparently less impressed with the bailout bill approval than with the economy's loss of 160,000 jobs.

In the words of house minority leader John Boehner: "Let's not kid ourselves, we're in a recession and it's going to be a rough ride."

But, what does this all mean for taxpayers?

Financial expert Kevin Funchion says the controversial rescue plan which is now law was necessary not only because it will stop the hemoragging economy, but also because it's a way to calm nerves on both Wall Street and Main Street.

Funchion warns there's a lot of work and a lot of uncertainty ahead, saying "The next part is how do we implement that, how do you distinguish which loans you can sell to the government?"

Funchion says that could take months, even years. He's not sure that taxpayers will see significant relief from the plan.

It uses $700 billion to buy risky investments from companies that have essentially imploded from making bad loans over the past decade. It also includes a provision that raises FDIC insurance from $100,000 to $250,000. Some economy staffers from the First Keystone Bank of Media believe that is a good thing.

"I think it's good news for depositors and I think that it will help reassure people that the money is safe," said Robin Otto of First Keystone Bank.

The plan also includes congressional controls over some executive pay and so-called "golden parachutes." It's also packed with what some dub as "sweetners" and others call "political pork."

They're add-ons that Pennsylvania Senator Bob Casey said were needed to get the bill through.

"Sometimes the legislative process is very messy and difficult, but we cannot allow perfect to be the enemy of good. We have to get it done if we want the ability to borrow money again," Sen. Casey said.

Now matter how it got done, Funchion added this signing is an unprecedented move by the government, and that just speaks to the severity of the problem.

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