The Bailout Plan for Foreclosures Information How will it be different?

Is the new bailout passed by the senate going to fix the sinking economy?

Inventories of foreclosed homes are continuing to rise in foreclosures mean more banked owned homes with even lower home prices and more homeowners going under water on their homes.

The banking system has more toxic residential real estate mortgages at a time when large losses in commercial real estate mortgages are coming as well resulting in more pressure on a financial system and economy that is fragile.

So far the Senate passed the measure by a vote of 74 to 25 after more than three hours of floor debate in the Senate.

Presidential candidates Sens. Barack Obama, D-Illinois, and John McCain, R-Arizona, voted in favor. After a previous rejection of the proposed 700 billion dollar bailout, now all are in agreement that the Senate will allow the Treasury access to 250 Billion immediately or are they?

President Barack Obama has recently announced the Housing Bail Out Plan, What is different this time around. well a few things, the legislation still has to be voted on by the House, will it be enough to sway House Republicans?. Not all is in agreement their are those who are for it and those who are against it.

What are the differing views?

• Advocates say the plan is crucial to government efforts to attack a credit crisis that threatens the economy and would free up banks to lend more.
• Opponents say it rewards bad decisions by Wall Street, puts taxpayers at risk and fails to address the real economic problems facing Americans.

What are the real issues, first lets take a look at the FDIC insurance, it will be raised from 100,000 to 250,000. the bill allows the FDIC to borrow from the Treasury to cover any losses that might occur as a result of the higher insurance limit.

Next to be added is the tax measures, which will extend a number of renewable energy tax breaks for individuals and businesses, including a deduction for the purchase of solar panels, other tax breaks will include the research and development credit for businesses.

The credit that allows individuals to deduct state and local sales taxes on their federal returns. The bill includes relief for another year from the Alternative Minimum Tax, as well as a measure that would require health insurers to treat mental health issues the same way they treat physical illnesses.

Potential Costs

According to CNN, when it comes to the potential cost "The tax provisions of the Senate bill - the bulk of which come from the addition of tax breaks from other legislation - may reduce federal tax revenue by $110 billion over 10 years, according to estimates from the Joint Committee on Taxation. More than half of that is due to the 1-year extension of AMT relief."

The bailout also known as the rescue package lets the government spend billions of dollars to buy bad mortgage-related securities and other devalued assets held by troubled financial institutions. If successful, advocates say, that would allow frozen credit to begin flowing again and prevent a deep recession.

Resources:

• CBSNews.com Home Page
• Dem, GOP senators explain 'yes' votes
• CNNMoney: Bill text (PDF) | Bailout Tracker
• Time: Why Main Street is mad

Watch Video on The Senate to Vote on $700 Billion Bailout