U.S. PRESIDENT BUSH SIGNS $700 BILLION FINANCIAL BAILOUT BILL
[Photo at left - Charles Dharapak / AP: President Bush signs the Emergency Economic Stabilization Act of 2008 in the Oval Office after the House passed the financial bailout bill Friday.]
MSNBC online, October 4, 2008 (Courtesy of MSNBC news network) <http://www.msnbc.msn.com/id/26987291> - By Alex Johnson Reporter MSNBC - President Bush signed into law Friday a historic $700 billion bailout of the financial services industry, promising to move swiftly to use his sweeping new authority to unlock frozen credit markets to get the economy moving again.
“It’s complicated, and we’re going to make sure whatever we do is done in a deliberative fashion,” Bush told reporters after he signed the bill as soon as he got it from the House, which passed the measure after a topsy-turvy week of legislative victories, defeats and power plays.
But he promised to get the ball rolling quickly, because the authority is “essential to helping America’s economy weather the financial crisis.”
Stocks were down moderately in late trading after the successful vote. Earlier, stocks had been up sharply.
After a week of reversals and intense lobbying, the measure ended up comfortably passing the House by a vote of 263-171 after members who voted to kill it earlier in the week came around to a Senate version that offered more protection for individual investors and small businesses.
Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke, who first sounded the alarms that set the rescue plan in motion after Lehman Bros. and other institutions foundered last month on Wall Street, also welcomed the news
“The broad authorities in this legislation, when combined with existing regulatory authorities and resources, gives us the ability to protect and recapitalize our financial system as we work through the stresses in our credit markets,” Paulson said in a statement, in which he promised to “move rapidly to implement the new authorities.”
Under the plan, the Treasury Department would be authorized to spend as much as $700 billion to buy bad mortgage-related securities, which have slowed and, in some cases, dried up the flow of credit.
The Senate dramatically changed the measure Wednesday, adding an additional $110 billion in additional tax breaks, incentives and other measures, including an expansion of coverage of individual bank deposits by the Federal Deposit Insurance Corp.
Leaders sought 12 new votes The calculus for Speaker Nancy Pelosi, D-Calif., and other House leaders was whether the additions would lure enough support to overcome new objections from conservative members to the added costs.
“House and Senate leaders promised the bill wouldn’t be a Christmas tree of add-ons, and in a matter of days it’s gone from a Charlie Brown Christmas tree to Rockefeller Center,” said Rep. Steve LaTourette, R-Ohio, who led failed efforts to strip out what he called “egregious” tax breaks. “It’s Christmas in October.”
But Majority Leader Steny Hoyer, D-Md., said compromise was needed. He said that while he strongly opposed the Senate’s decision to pay for many of the tax breaks with debt, he could not forget everyday Americans at home who were struggling.
“For their sake, we must act,” Hoyer said in a floor speech.
AIG plans sale of Philamlife Saturday, October 4, 2008
Insurance giant AIG announced yesterday plans to divest a number of valuable assets worldwide, including its Philippine unit Philamlife, to generate sufficient funds to repay its $85-billion bailout loan from the Federal Reserve Bank of New York.
In a statement, AIG said it will refocus on its core and casualty insurance business and pursue investors to acquire minority interests in their other business units.
It said Philiamlife has been identified for possible sale along with some of Philamlife’s affiliates.
Philamlife, the largest and most profitable insurance company in the country and the undisputed market leader for over 60 years, is a crown jewel for AIG, making it an attractive acquisition for local and international buyers.
AIG said its divestnment decision is not a reflection of their subsidiaries’ business or historical performance.
“AIG’s subsidiaries in the Philippines remain financially strong, well-capitalized and comply with local regulatory capital requirements,’’ AIG said.
Philamlife president and CEO Jose L. Cuisia Jr. said: “Philamlife remains to be a stable and strongly capitalized organization. Our policy owners and clients can be assured that their interests are protected because of the company’s financial strength. A change of ownership will not in any way diminish policy owners’ benefits and security. We will remain focused on daily execution of our business and continue to provide our policy owners and clients with the highest level of service.’’
Philamlife has consolidated assets of P170 billion and consolidated stockholders’ equity of P49.5 billion. In 2007, revenues amounted to P36.7 billion, reflecting a 14-percent growth from a year ago.
Chief News Editor: Sol Jose Vanzi
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