What the Bailout Bill Means to You
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AP
Benefits of the Bailout
The U.S. government passed a $700+ billion economic bailout package in an effort to stabilize the flailing banking sector. So far, it hasn't worked as hoped and the financial crisis has deepened since the law was approved. That's the bad news.
The good news is that there is a lot more than help for just banks in the 451-page legislation. Lawmakers added hundreds of other "sweeteners" to make the bill more popular with the public. See if you can benefit from any of the following provisions.
First Up: Mortgage TermsMore on the Financial Crisis:
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Easier to Get Your
Mortgage Terms ModifiedThe new law asks Federal agencies to encourage companies that service mortgages to help their borrowers who are having trouble making payments modify their loans so they become more affordable. It sounds a little vague, but lenders are already responding to government prodding and agreeing to modify mortgage terms for some distressed borrowers. Bank of America, for example, announced a new plan Oct. 6 that will aid certain former Countrywide mortgage holders.
Next: Another Bailout BenefitMore on the Financial Crisis:
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Mental Health Issues Treated Like Other Illnesses
The law requires health insurance companies to cover treatment for mental illnesses the same way they cover any other disease. This became part of the law due to procedural requirements. The Senate's financial rescue plan was actually added to a bill for "mental health parity" that passed the house last March.
Next: Another Bailout BenefitMore on the Financial Crisis:
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More Insurance for Bank Deposits
Now your bank deposits are protected up to $250,000 for each account. Formerly, the Federal Deposit Insurance Corporation (FDIC) backed your deposits up to $100,000. The increase is temporary, but is likely to be extended.
Next: Another Bailout BenefitMore on the Financial Crisis:
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AMT Reform
Fewer taxpayers are going to get hit with the dreaded Alternative Minimum Tax (AMT), a parallel tax code that was originally intended to make sure wealthy people paid their fair share of taxes, but which has increasingly slammed middle-income earners. Basically, unless you make more than $100,000 for single taxpayers or $175,000 for married taxpayers filing jointly, you shouldn't have to worry about the AMT due to the change.
Next: Another Bailout BenefitMore on the Financial Crisis:
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Caps on Executive Pay
Again, the terms here are a little murky, but basically executives of firms that participate in the bailout could have to repay some of their bonuses if the funds were awarded based on inaccurate financial statements. Execs also should not get so-called "golden parachutes" or large payments if they are fired. This provision may have psychic, rather than monetary benefits for those Americans who are angry about the high pay awarded some of the same bankers who have presided over the economic crisis.
Next: Another Bailout BenefitMore on the Financial Crisis:
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Banks May Be
Less at Risk of Failing(Due to Accounting Issues)
In a controversial move, the law asks the Securities and Exchange Commission (SEC) to consider changing accounting rules that require banks to value securities at market prices even when there are no buyers. That so called “mark-to-market” requirement means banks have to account for some securities as if they are worthless (putting them in bad stead with rating agencies), even if they are sure the securities will eventually be worth something.
Next: Another Bailout BenefitMore on the Financial Crisis:
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Assorted Niche Tax Breaks
The bailout plan has been faulted for including lots of pork -- provisions that benefit a small number of people, but that can be key to a politician's reelection bid. The law contains tax breaks that benefit makers of wooden arrows used in children's toys, the rum industry of Puerto Rico and the Virgin Islands, wool manufacturers and racetrack owners to name a few.
Next: Another Bailout BenefitMore on the Financial Crisis:
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More Development of
Alternative EnergyThe law contains extensions for some tax breaks intended to spur the use and development of alternative energy. Homeowners can continue to get tax credits to cover part of the costs of solar panels, windmills, geo-thermal heating systems and electric cars. Companies that invest in alternative energy technologies will also continue to enjoy some nice tax breaks.
Next: Another Bailout BenefitMore on the Financial Crisis:
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Cassandra Shie, AOL
Lower Taxes in the Future?
A part of the law which invites skepticism currently, allows the government to take equity stakes in Wall Street firms that participate in the bailout. Theoretically these stakes could one day be quite valuable. Another provision states that after five years, if there are any losses due to the bailout, the government will recoup the shortfall from the financial services industry. In theory, one day this could mean growth in government coffers without tax increases to individuals. That would be nice.
· Read Full Blog Post by Amey Stone
More on AOL: Companies in CrisisMore on the Financial Crisis:
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More From AOL:
Companies Hit Hardest by Credit Crisis
Now that you've seen how you may be able to benefit from the financial bailout, see which companies are not so lucky. These 14 companies have been hit hard by the credit crisis.
Next Gallery: 14 Companies in JeopardyMore in Money & Finance:
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Recent Comments
Nebraskawon 10:20:01 PM Oct 16 2008
wow...after watching the nyse all day...i gotta wonder who would have 500 billion just laying around to recover the market all day?...lmao
Nebraskawon 12:24:13 PM Oct 12 2008
700,000,000,000 divide by 200,000,000 =?....u do the math...lol...ok...lets make it ez'er for u...try this...7,000 divide by 2=????
Not4saken12 01:22:18 AM Oct 10 2008
Ok...it posted all crowded together..so here is the link again END OF AMERICA .. GIVE ME LIBERTY http://www.youtube.com/watch?v=_XgkeTanCGI
Not4saken12 01:18:50 AM Oct 10 2008
In response to Queenforce, and all who don't know what to do and are mad as heck! We have to stand up for our rights, right now, before we can't any longer!!Call to Action - must watch NOW!!!END OF AMERICA .. GIVE ME LIBERTY http://www.youtube.com/watch?v=_XgkeTanCGIPlease watch this URGENT video message, ASAP and urge others to do so as well. We, as citizens, must act now!!!I would like to hear what anyone elses thoughts are on this!!! United we stand!..Indivisible, for liberty and justice for all!we do need to protest this travesty of justice to Americans and time is short! The election is in weeks. I just watched a report ..easier for you to watch than for me to explain..but it explains the URGENCY OF ACTION NOW!!! Otherwise, yes, this is a New World, but there is NO Order! Things have gone completely out of control and our money has been stolen from us right under our noses...not only that, but now we face living in the streets because of oil prices, foreclosures, increased taxes a
Not4saken12 12:54:40 AM Oct 10 2008
Hey people, instead of being mad and not voting, or voting for either party, that has destroyed our country...why not have hope and check out RON PAUL! I have tried to post this quite a few times but it isn't posting. Just google RON PAUL..you'll see what I am talking about. Make your own decision, but we need someone like him. He has integrity, is honest, voted NO both times on the bailout, with a brave speech to CONgress, He walks his talk and has the record to prove it! Neither candidate, nor their VP choices...can even come close. Ron Paul is an economics expert and has presented a plan that could save us, which was overlooked by the BIG MONEY THIEVES who are all trying to hide this mess..gov't officials and big money..and all their mistakes. Ron Paul isn't pointing fingers, just wants to bring America back strong!
Queenforce 11:12:04 PM Oct 09 2008
We need to protest and demand the money be returned and given to us. Our gov't just does whatever they want. they shoved that B u l l s h i t we have to act now line, so we wouldn't have time to think about it and say ok it's for the better of our country and not ask questions. Now that we see what was done it's too late. NOW WHAT REALLY PISSES ME OFF IS, THEY JUST GAVE AIG ANOTHER 83 BILLIONS DOLLARS AFTER THEY WENT ON A SPENDING SPREE. Where is this money coming from. Didn't Insane McCaini just state on the debate the other night that there wasn't any money for Soc. sec. REally, I saw over 800 billion dollars come out of nowhere. How about putting some of that into the soc. sec. Bunch of B U L L SH I T T ERS. What are we going to do America. I called my representatives. I dont' know what else can be done.
Kaiwa747 02:02:16 PM Oct 09 2008
JasMathe5: you are right...the population is 380 million and 2 million to the people 18 and over.
Kaiwa747 01:58:50 PM Oct 09 2008
if the population is 380 million people why not pass a bill and give the people 2 million dollars, so they can clear their debt and pay off they home.
JasMathe5 08:39:03 AM Oct 09 2008
700 billion dollar bale out 200 million people over the age of 18 in the united states if it was divided between us all do the math would the economy be in bad shape then but the package as proposed will you ever see a dime of it i gotta say no! and we got politicians spending fortunes of dollars on this matter and then hiring investigators to make sure it gets spent wisely who is wasting our money now?
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