H.R.3221 in action:

Senior officials from the Bush administration and the Federal Reserve on Friday called in top executives of Fannie Mae and Freddie Mac, the mortgage finance giants, and told them that the government was preparing to place the two companies under federal control, officials and company executives briefed on the discussions said.

The plan, which would place the companies into a conservatorship, was outlined in separate meetings with the chief executives at the office of the companies’ new regulator. The executives were told that, under the plan, they and their boards would be replaced and shareholders would be virtually wiped out, but that the companies would be able to continue functioning with the government generally standing behind their debt, people briefed on the discussions said.

It is not possible to calculate the cost of any government bailout, but the huge potential liabilities of the companies could cost taxpayers tens of billions of dollars and make any rescue among the largest in the nation’s history.

NYT

Some bad news related to the two most-viewed bills on OpenCongress – H.R.5749 and S.2544, via the AP:

The nation’s unemployment rate bolted above the psychologically important 6 percent level last month for the first time in five years — and it’s likely to go even higher in the months ahead, possibly throwing the economy into a tailspin as Americans pick a new president.

A blizzard of pink slips propelled the jobless rate from 5.7 percent in July to 6.1 percent in August, the Labor Department reported Friday. Such a sharp increase is usually a strong recession warning, and it dashed investors’ hopes for a late-year recovery.

Worried about the economy and their own business prospects, employers cut payrolls by 84,000 in August, marking the eighth straight month of losses.

So far this year, a staggering 605,000 jobs have vanished — slightly less than the population of Alaska. The economy needs to generate more than 100,000 new jobs a month for employment to remain stable.

If it goes up another .3 percent, we’ll hit the next landmark – the highest rate of unemployment since 1994.

via an email from Senate Democrats…

We hope this message finds you enjoying the last days of the August recess. When the Senate goes back into session next week, we begin a busy work period with much legislative business to complete before the November elections. Below is a summary of what Sen. Reid plans to work on during this period; as always, this summary is subject to change.

Defense Authorization: On Monday there will be a cloture vote on the motion to proceed to the defense authorization bill, S.3001. The Senate convenes at 3:00pm on Monday and the cloture vote is scheduled for 5:50pm. You will recall that Senate Republicans blocked proceeding to the defense authorization bill before the August break – cloture was rejected by a vote of 51-39 on July 31.

Energy: The Stop Excessive Energy Speculation Act, S.3268, is the pending business before the Senate. If cloture is not invoked on the motion to proceed to the defense authorization bill, the Senate could resume debate of this measure.

Sen. Reid has scheduled an energy summit involving senators from both parties to take place on Friday, September 12. The goal is to discuss bipartisan solutions to the country’s energy crisis. Additionally, the “Gang of 16” has indicated that it is drafting legislation to address supply, conservation, alternatives and taxes. Sen. Bingaman, chairman of the energy committee, also is drafting legislation on the same subjects. No decisions have been made, but either of these measures or others could be considered as amendments to, or in lieu of, the pending speculation bill. We understand that the House may consider energy legislation next week as well.

Economic Stimulus: The House is expected to assemble a second economic stimulus bill for consideration in September. Sen. Reid also plans to bring up a stimulus bill for debate this month, though details are still being worked out.

Tax Extenders: Sen. Reid will continue to use every means necessary to pass a tax-extenders bill. Senate Republicans blocked cloture on motions to proceed to both S.3335 and H.R.6049 before the break, but Sen. Reid and Sen. Baucus remain committed to re-extending incentives that will spur investment in the renewable-energy sector, among other important policies.

Appropriations bills: Defense, military construction, homeland security, foreign operations and other appropriations bills also remain on the to-do list.

Continuing Resolution to fund government. Sen. Reid expects to have the Senate consider a continuing resolution to ensure continued operations of the government into next year. This measure will include funding for any agencies not otherwise funded through the regular appropriations process.

Additionally, there is other unfinished business that Sen. Reid will work to consider:

• Equal pay legislation
• Advancing America’s Priorities Act, S.3297 (the Coburn bill);
• Warm in Winter and Cool in Summer Act, S.3186 (the LIHEAP bill);
• Americans with Disabilities Act Restoration Act; and
• Media Shield

The House’s targeted adjournment date remains September 26. This date also remains the goal for Sen. Reid, but observers might reasonably conclude that finishing the above legislative business before September 26 will be difficult and will require significant cooperation from Senate Republicans.

First edition from Open Left’s Chris Bowers, the man with the best forecast of Democratic pickups in the nation in 2006.

“The current projection shows a Democratic gain of 12-18 seats, which would result in a majority of somewhere between D 248-187 R to D 254-181 R.”

Download the three-page pdf to view district-by-district details.

To be certain, a lot of things. But one of the most substantial and controversial of them is a $50 billion government bailout of the big three American automakers.

CNN Money:

Plunging auto sales, high gas prices and election year politics could help convince Congress to approve a $50 billion loan package to embattled U.S. automakers that Detroit’s Big Three claim is key to their future success.

The Big Three are now in the process of closing truck assembly lines and rushing to catch up with hybrid and other fuel efficient offerings from Toyota Motor and Honda Motor.

But with GM and Ford saddled with junk bond debt ratings and privately-held Chrysler with the thinnest capital cushion of the three, Detroit is caught in a credit squeeze that will make such investment difficult if not impossible.

Thus, the automakers have deployed what one industry official describes as a “surge” of lobbyists and executives at both the Democratic and Republican Party’s political conventions. The Big Three’s hope is that if they can win speedy passage of the loan package, they can move more quickly to retool their plants to produce more smaller cars.

Here’s the kicker:

Industry experts say that while the savings from the lower interest rates would amount to billions of dollars for the automakers, the program may not necessarily save a member of the Big Three from eventual bankruptcy in the way that federal loan guarantees rescued Chrysler in the 1970’s.

So, what do you think? Are the Big Three like Bear Stearns, Fannie Mae and Freddie Mac – “too big to fail”?