WASHINGTON (AFP) — The administration of President Barack Obama is considering new bailout initiatives that will allow troubled companies to benefit from rescue programs while avoiding restrictions imposed by Congress, The Washington Post reported Saturday.
Citing unnamed government officials and sources, the newspaper said the congressional restrictions in question include limits on executive pay.Experts at the Obama administration have concluded that this approach is vital for persuading firms to participate in programs funded by the 700-billion-dollar financial rescue package, the report said.
The administration believes it can sidestep the rules because, in many cases, it has decided not to provide federal aid directly to financial companies, the paper said.Instead, the government has set up special entities that act as middlemen, channeling the bailout funds to the firms and, via this two-step process, stripping away the requirement that the restrictions be imposed, The Post reported.
Although experts are questioning the legality of this strategy, the officials said it gives them wide latitude to determine whether firms should be subject to the congressional restrictions, the paper noted.
Last Updated: April 4, 2009 03:09 EDT
