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The House Republican Study Committee is set Tuesday to officially unveil its proposal to address the financial crisis through a “market-based” approach. The conservative group, which has strong objections to a federal bailout that would cost hundreds of billions of dollars, is touting its plan as a “true alternative” to Treasury Secretary Henry Paulson’s plan to rescue the financial markets. The RSC plan, which will be unveiled at noon, calls for a two-year suspension of the capital gains tax. “By encouraging corporations to sell unwanted assets, this provision would unleash funds and materials with which to create jobs and grow the economy,” an outline of the proposal said. “After the two-year suspension, capital gains rates would return to present levels but assets would be indexed permanently for any inflationary gains.” The group’s plan would also transition Fannie Mae and Freddie Mac to private companies “in a reasonable time,” seeks to stabilize the dollar, and would “suspend the mark-to-market regulatory rules for long-term assets.” The group is concerned that the bailout plan proposed by the Bush administration “fundamentally alters the nation’s free-market system in that it broadly socializes firms' money-losing mortgage assets and places the U.S. on a slippery slope whereby profits will also be nationalized.” The RSC also objects to granting the Treasury secretary broad authority “with virtually no accountability.” |
