The American Spectator

House Republican Policy Committee Chairman Thaddeus McCotter is proposing a ten-point private recapitalization plan to restore stability to the financial markets, in opposition to the Bush administration’s proposed bailout plan that Congress is currently considering.

Over the past three days, conservatives in Congress have raised serious doubts about the $700 billion Paulson Plan, and as Democrats have attempted to play politics with the plan, it now appears the Bush bailout may not be passed by the end of the congressional session, which is expected late Thursday or Friday. McCotter’s plan is the most specific alternative on the House side and reflects criticism from such quarters as former Speaker of the House Newt Gingrich.

According to a senior House leadership aide, Minority Leader John Boehner has been attempting to rally GOP support for the Paulson Plan, with an expectation that some Democrats will not back it.

p>Below is the alternative plan as laid out in an email McCotter has sent out: br> /p> blockquote>September 23, 2008 p>McCotter Opposes Paulson Plan; br> Outlines Pro-Taxpayer, Private Recapitalization Plan /p>

“Expedited American Recapitalization — Now” Act

(EARN Act)

1. Expedited American Recapitalization — Now (EARN) Proceedings: A sunset bill that makes available to financial institutions a pre-packaged recapitalization (EARN) proceeding in which debt forgiveness is expedited. (This is similar to expedited bankruptcy proceedings. The strike warrant price will determine values.)

2. Inducement to EARN Proceedings: To induce financial institutions to undergo EARN proceedings, future government recapitalization (if necessary) may not be offered to a financial institution which does not go through an EARN proceeding.

3. Incentivize Private Recapitalization: If, within a limited one year window (commencing upon this legislation’s enactment into law), a person invests in (i.e., recapitalizes) a financial institution that has undergone an EARN proceeding, this investment over its lifetime is subject to a ZERO capital gains tax rate. If, within the same one year window, a person purchases a toxic asset, this investment over its lifetime is subject to a ZERO capital gains tax rate.