(Reuters) - The Bush administration is proposing sweeping authority for the U.S. Treasury to buy up to $700 billion of mortgage assets, in a bid to end financial carnage on Wall Street.
Below are key elements of the powers that would be granted to the U.S. Treasury Secretary under draft legislation being discussed on Saturday by key congressional leaders and top administration officials, a copy of which was obtained by Reuters:
* Buy any mortgage-related assets, both residential and commercial, for a two-year period. The types of mortgage assets this could cover and how long the government could hold them is left wide open, as is how they would be valued.
* Up to $700 billion in mortgage assets could be bought at any one time
* Broad authority granted to decide how to purchase, manage and dispose of the assets, including setting up a special fund and naming financial institutions to work for the Treasury Department.
* Assets must have been originated or issued before September 17, 2008, by a bank or financial institution with U.S. headquarters
* The Treasury Secretary would be given these powers to ensure stability or prevent disruption of financial markets and to protect the taxpayer
* No court or government agency could review the secretary’s decisions. The secretary would report to Congress within the first three months and then twice yearly
* The U.S. debt limit would be increased by $700 billion to fund the plan, to $11.315 trillion from $10.615 trillion.