U.S. gov't announces $700 bil. bailout plan to clean up bad assets

WASHINGTON, Sept. 21 Kyodo - The U.S. government announced a $700 billion bailout plan Saturday to clean up bad debts at U.S. financial institutions as it battles with one of the worst financial crises in decades.

The U.S. government will purchase bad mortgage-related assets over the next two years under the plan, which is a key pillar of a comprehensive package aimed at stabilizing financial markets and preventing further economic deterioration.

The plan calls for giving the treasury secretary broad authority to purchase such bad assets from financial institutions in the United States. The treasury
secretary will consult with the chairman of the Federal Reserve Board in making
purchase decisions.
The statutory limit on the national debt will be raised from $10.6 trillion to
$11.3 trillion to prepare for the government's debt issuance to finance the
bad-asset purchase.
The plan was unveiled amid mounting fears of a financial meltdown after the
failure of the nation's fourth-largest investment bank, Lehman Brothers
Holdings Inc., and the bailout of embattled insurer American International
Group Inc. earlier this week.
The government has asked Congressional leaders to promptly come up with bills
to implement the latest plan, hoping they will be passed by Friday, officials
said.
U.S. House of Representatives Speaker Nancy Pelosi said Saturday in a statement
that she will cooperate on compiling the bills while calling for the inclusion
of measures to assist middle-class Americans.
==Kyodo