Plan II. Plan II is much like Plan #I except that various Democratic legislators are making noises about 'conditions' to be included in the legislation. Foremost among such conditions is relief for homebuyers in default...a vague concept. This concept is that Wall Street shouldn't get all the benefit; rather Main Street should get relief from Uncle Sam also. Obviously such relief would take the form of mortgage interest rate reductions, payment deferments, or even principal writedowns, or similar, related to the mortgage debt that the government buys (as well as, perhaps, the estimated $5 trillion of Fanny and Freddie mortgages previously issued and guaranteed by our government in last month's bailout). Much could be written about the justice or injustice inherent in such a concept of mortgage-relief. The current bagholders (i.e., defaulting mortgagors) is an assortment of persons owning multiple homes, past speculators/flippers in the RE market, and perhaps some people with jobs. Another key condition to be found in Plan II and not in Plan I would be 'oversight' ...again a vague concept. I think this could be interpreted as scaling back the degree to which Paulson would be given a blank check in negotiating when spending the $700 billion, or more, and then reselling the same bad paper later (when our economy is rosy again). In other words, the Democrats want to hang onto some control over to whom, for what, and when this bundle is paid out. (Side Note: Paulson may be replaced when a new President takes office on Jan 20, 2009.)
I suspect the final bailout bill will resemble Plan I--unfortunately. Why? Let me list some reasons: Congress is convinced that it has a gun to its head and that the markets are about to pull the trigger. Also, the Democrats are not organized about what exactly they want in the bill (probably impossibilities given the current debacle). Congress is scheduled to go on vacation at the end of this week to campaign and nothing deserves more priority than campaigning (an outrageous excuse to hurry along such important legislation!). The public is not paying sufficient attention or doesn't understand what is going on.
Contact your representatives in Congress! It is urgent! This bill is being conceived and finalized all within one week. Raise hell! If ever there was a time a Congressman might stop and read a constituent's letter, it is just before an election.