Emergency Economic Stabilization Act of 2008

The revised Emergency Economic Stabilization Act (EESA) of 2008 was approved by both houses of Congress and President Bush signed the bill into law on October 3, 2008.

A summary of the original version of EESA 2008:

• Provides the Treasury with $700 billion to buy bad mortgage-related investments from banks. This move will gradually make credit more available for businesses and working families, and help unfreeze the economy. Also, it is hoped to stabilize the markets and help protect American's retirement investments.

• Helping troubled homeowners by requiring the Treasury and other government agencies to modify loans to help people stay in their homes. Also, the Hope for Homeowners Program has been improved by expanding eligibility and by giving the Department of Housing and Urban Affairs more tools to help homeowners.

• The protection of taxpayers by requiring that rescued banks sell some of their assets to the government, so that the taxpayer can benefit from future growth of these banks.

• Limits the benefits of executives from rescued companies, limits "golden parachutes", in some cases limits executive pay, and limits some of the companies' tax benefits.

• Provides the Treasury with an Oversight Board to protect taxpayer money against waste, fraud, and abuse. Divides up the rescue money - $250 billion initially, $100 billion if deemed necessary by the President, and then $350 billion subject to disapproval by Congress.

The additions to the approved version of the EESA:

• Includes tax incentives for businesses to invest and create jobs.

• Temporarily expands federal insurance for bank and credit union deposits from $100,000 to $250,000.

• Provides families with relief from the Alternative Minimum Tax, which would otherwise increase taxes for 26 million taxpayers by an average of $2,200.

Source:
The White House