[Q] - I have read Dodd’s proposed statute and in some respects,
it is far worse than has been reported. Senator Dodd has placed a
loophole in the bill that is explicitly designed to siphon off tens or
hundreds of billions of dollars to the Housing Trust Fund and the
Capital Magnet Fund even if there are no net profits in the $700
billion venture.
Here is the provision that has already been widely noted:
d) TRANSFER OF A PERCENTAGE OF PROFITS.-
(1) DEPOSITS.-Not less than 20 percent of any profit realized
on the sale of each troubled asset purchased under this Act shall be
deposited as provided in paragraph (2).
(2) USE OF DEPOSITS.-Of the amount referred to in paragraph
(1)-
(A) 65 percent shall be deposited into the Housing Trust Fund
established under section 1338 of the Federal Housing Enterprises
Regulatory Reform Act of 1992 (12 U.S.C. 4568); and
(B) 35 percent shall be deposited into the Capital Magnet Fund
established under section 1339 of that Act (12 U.S.C. 4569).
(3) REMAINDER DEPOSITED IN THE TREASURY.-All amounts remaining
after payments under paragraph (1) shall be paid into the General Fund
of the Treasury for reduction of the public debt.
The biggest problem here is that the 20% is not taken from net
profits, but rather from any profit in the sale of each and every
individual troubled asset. -
http://granitegrok.com/blog/2008/09/more_on_why_the_bulls_eye_should_be_on_p.html
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