Senate Bailout Bill Up for Vote; Citizens Protest, World Leaders Watch and Wait

The Senate is poised to vote tonight on a 451-page conglomeration of legislation that includes 113 pages relating to the Wall St. bailout. The Senate legislative package revives the bailout bill rejected by the House of Representative Monday and incorporates tax breaks and myriad provisions not specifically related to redressing the economic crisis including energy policy, mental health parity and national disaster relief. The full text of the Senate bailout bill is here.

Mark to Market Provisions

Section 132 of the bailout bill authorizing the Security and Exchange Commission (SEC) to suspend mark to market accounting when it is determined to be in the public interest remains unchanged from the House version. Also unchanged is Section 133 requiring an SEC report within 90 days of the bailout bill's enactment on the feasibility and desirability of modifying mark to market.

Mark to market has been the subject of intense media coverage since the House bailout bill failed, with former House Speaker Newt Gingrich, writing in Forbes, quoting a Chicago economist as blaming mark to market for 70% of the market crisis. The Center for Audit Quality (CAQ) opposes changing mark to market, deeming the rule essential to transparency and informed market decision making. The CAQ credits the mark to market rule with revealing the severity of the nation's credit crisis and states that the rule did not create the crisis.

FDIC Limits

Federal Deposit Insurance which insures bank accounts up to $100,000 would be temporarily increased to $250,000 through December 31, 2009 under Section 136 of the Senate bailout bill. This provision is veritable window dressing since most bank depositors concerned about inadequate insurance coverage can establish multiple qualifying accounts under the $100,000 limit and receive full insurance coverage on each. The provision is aimed at preventing bank runs by large depositors.

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