I am not a bail-out enthusiast but have been looking at the issue from the pragmatic perspective that something had to be done. Having now quickly read the bill, I am concerned about the grant of extraordinary powers to Paulson and the continued absence of sensible checks on his broad authority. He will remain largely unaccountable in all the important areas and did not concede much in the negotiations.
The "compromise" bail-out bill includes at least one extraordinary provision that will make the so-called improvements in the bill very difficult to enforce. It pertains to the ability to challenge whether Paulson (or his successor) is complying with central provisions of the compromise. The bill makes it very difficult to challenge the lawfulness of Paulson’s action in court. It does so through an insidious little provision – section 119(a)(2) – which prohibits the courts from enjoining the Secretary of the Treasury from violating three of the bill’s most important provisions. Those provisions are the provisions concerning the purchase of "troubled assets" (section 101) (the heart of the bill), the provision requiring the submission of frequent reports to Congress on specific matters (section 105), and the provision regulating conflicts of interest in the administration of the bail-out fund (section 108).
For non-lawyers, the practical effect of prohibiting injunctive relief is that compliance with these three core provisions cannot be enforced through immediate intervention of the courts. In practical terms, violations of these provisions can only be adjudicated after-the-fact when it will be too late to remedy things such as the prohibition against "unjust enrichment" of participating financial institutions and the rules against conflicts of interests. And of course the court’s rulings cannot be backed up by orders directing the Treasury Secretary to take specific remedial steps to cure violations of the law. To be really simple, an injunction can be obtained quickly and could take the form of telling Paulson to stop doing x-y-z until the court makes a final ruling on the lawfulness of x-y-z or ordering him to rake actions a-b-c immediately to bring his actions into compliance with the law.
This provision jumped out at me as truly egregious and suggests that our Democratic negotiators did not do a whiz-bang job. What's the point of requiring Paulson to submit detailed reports to Congress if he knows that he can ignore those provisions with impunity? This provision prohibiting injunctive relief is a more practical version of the provision in Paulson’s original three-page draft that made his actions nonreviewable. The inability to secure injunctive relief means that, for all practical purposes, there will be no tools to enforce the core provisions of the bill.
My take on it is that Paulson ends up with most of the powers that he sought in his three-page bill, with a few bones thrown to Democratic lawmakers. The bill is somewhat improved but it is still a travesty in terms of consolidating tremendous power in the hands of a single appointed official.