Dodd Steps in the Right Direction

These proposals from Chris Dodd seem like steps in the right direction to me:

Senate Democrats want to add tough new measures to the Treasury Department’s proposal to bail out financial firms, including strict limits on executive compensation and a provision that would allow the government to take shares of any financial institution that participates in the program.

Senate Banking Committee Chairman Christopher Dodd of Connecticut began circulating his 44-page draft Sunday night. The draft is likely to prove problematic for the Bush administration, which has tried to prevent lawmakers from making big changes to a much simpler proposal it unveiled over the weekend. Treasury’s plan would allow the government to buy up to $700 billion in mortgage-related assets from banks and others to prevent a worsening of the financial market turmoil.

Still, you need to watch the legislative mechanics here. If progressives start out by saying “yes a bailout is needed” and then adding “but we also need this other stuff” then what’s going to happen is the conservative bloc will say “well, you guys need to radically scale back your good stuff” and then progressives will be cornered. You need to insist on the provisions that could make this plan a good one. What’s more, while this sounds like an improvement over the Bush/Paulson plan it still doesn’t seem to do much of anything to help restructure mortgages a step that’s vitally necessary from both a fairness and an effectiveness perspective.