So, what were the Republican proposals that Harry Reid and Barney Frank, in particular, were screaming about as the big holdup? Below I have for you the details of the GOP working group's proposal; the group was headed by Eric Cantor and included some of the brightest lights in the GOP including Jeb Hensarling, John Campbell and Paul Ryan.

As you can see, it's hard to see what was so offensive about these ideas that they should have thrown the Dems into such a tizzy:

I.         Wall Street - Not Taxpayers - Should Fund the Recovery
                      
                       The most troubling part of Sec. Paulson's plan is that it relies wholly on taxpayer funds. House Republicans believe that rather than providing taxpayer funded purchases of frozen mortgage assets to solve this problem, any rescue package should adopt a plan to insure mortgage backed securities (MBS) through payment of insurance premiums.
 
Currently, the federal government insures approximately half of all MBS and can insure the rest of those still outstanding.  However, rather than taxpayers funding the insurance, the holders of these assets should pay for it.  The working group's proposal would direct the Treasury Department to design a system to charge premiums to the holders of MBS to fully finance this insurance.
                       
 
II.       Private Capital - Not Tax Dollars - Should Be Injected Into Financial Markets
                      
                       Instead of injecting taxpayer funds into the market to produce liquidity, private capital can be drawn into the market by removing burdensome regulatory and tax barriers that are currently blocking private capital formation.  In short, too much private capital is sitting on the sidelines during this crisis, and it is well past time to unleash it.
 
                       Temporary tax relief provisions can help companies free up capital to maintain operations, create jobs, and lend to one another.  In addition, the working group recommends a temporary suspension of dividend payments by financial institutions and other regulatory measures to address the problems surrounding private capital liquidity.
 
 
III.      Immediate Transparency, Oversight, and Market Reform
                      
                       Both Republicans and Democrats have made clear that they believe there is not a strong enough oversight component in Sec. Paulson's plan.  The House Republican working group's proposal addresses this flaw.  To begin, the plan would require participating firms to disclose to the Treasury Department the value of their mortgage assets on their books, the value of any private bids within the last year for such assets, and their last audit report.  Additional safeguards include:

- To limit federal exposure for high risk loans, the working group's recommendations mandate that Government Sponsored Entities no longer securitize any unsound mortgages.

- The plan would call on the Securities Exchange Commission (SEC) to audit reports of failed companies to ensure that the financial standing of these troubled companies was accurately portrayed.

- The blueprint would guarantee that Wall Street executives do not benefit from taxpayer funding.

- The proposal would call on the SEC to review the performance of the credit rating agencies and their ability to accurately reflect the risks of these failed investment securities.

- The working group recommends that Congress create a blue ribbon panel with representatives of Treasury, SEC, and the Federal Reserve Board to make recommendations to Congress for reforms of the financial sector by January 1, 2009.

...end note.

Mostly common sense, right? Maybe that's the Democrats' objection.

Just looking at the points above, I'd suspect it would be hard to define what constitutes an "unsound" mortgage which can't be securitized, and I wish in the accounting they would propose lifting the mark-to-market rules which are adding to this spiral.

But the idea about providing incentives to encourage private capital to re-enter these markets? I doubt that idea offends too many Americans, but that has to be the part the Dems hate most.

These are actually wide philosophical gulfs... it will be interesting to see if these guys are willing to walk from this bailout plan if some of their above ideas aren't incorporated into a final package. They shouldn't be afraid to do just that.

**Posted earlier at my blog, Hanlon's Pub.

***Earlier today in the Pub, I pointed out how Democrats could pass this thing without a single Republican vote and harkened back to a hilarious YouTube video in that same post... you may have seen it, but it's sooo worth revisiting.