[UPDATE Of course, a one page agreement on principals isn't, as it turns out, an actual agreement, let alone legislation. I blame The Clenis. -- lambert]

Here's the "deal", via McClatchy:

The negotiators produced a one-page "agreement on principles" that includes:

-- Funding. Treasury would be authorized to spend $700 billion, but would get only $250 billion immediately, with another $100 billion to be released once the Treasury secretary certifies the money is needed. The other $350 billion could be canceled if Congress passed a joint resolution of disapproval.

It should be the other way round; the second "tranche" should be allowed only if Congress opts in.

-- Executive pay. The Treasury Department would "set standards to prevent excessive or inappropriate executive compensation for participating companies."

Fox, meet henhouse. And how about the compensation for all the consultants and asset managers who are going to move from the Wall Stret tit to the government tit? Shouldn't they be paid at Civil Service pay grades?

-- Taxpayer equity. Taxpayers could share in the profits of firms that benefit from the bailout as they return to financial health.

"Could"?

-- Oversight. The legislation would establish a "strong oversight board with cease and desist authority," as well as an independent inspector general who would monitor "the use of the Treasury Secretary's authority." The Government Accountability Office, Congress' investigative arm, also would audit the use of bailout funds. Regular detailed reports to Congress on the program would be required.

This actually does sound better, although the "regular detailed reports" should be every two weeks or so, and put on the Internet for all to see, in the interests of transparency_{MR SUBLIMINAL Hi, Obama! [waves]}.

-- Homeowners. The agreement mandates maximum coordinated efforts to modify mortgages for homeowners at risk of foreclosure; requires loan modifications for mortgages owned by the federal government; and directs that a percentage of future profits go to federal housing funds.

Still not HOLC. Why?

-- Judicial review. The government would be barred from "acting in an arbitrary or capricious manner or in any way that is inconsistent with existing law," which ensures the possibility of legal challenges in court. The original administration plan would have prohibited judicial review.

Retroactive immunity should be explicitly forbidden as well.

Um, is there a clear, coherent explanation anywhere of why Hank Paulson's golfing buddies need their trillion NOW NOW NOW? If there is, I haven't heard it, and yes, I listened to Junior's bogus speech. The shifting rationales remind me powerfully of the Iraq War, as does the whole "sky is falling" schtick.

The sensible thing to do for Congress would be to go home, listen to their constituents, and see what to do.

The insane thing to do would be to take a one-page statement of principals and craft legislation from it.

I have every confidence the Village will do the insane thing. They never fail me!

NOTE As Joe Galloway says, the plan boils down to "trust us" (a phrase that, in Village-speak, means "Fuck you!") Paulson's plan boiled down to trusting Paulson, and indeed that crashed and burned. And if we had a government with a functioning system of checks and balances, this plan might be pretty good. But we don't. Three major and obvious changes would be: 1. To put the burden on Treasury to say why they need to second tranche, rather than on Congress to see why they don't; 2. To elevate transparency to the level of a principal and then make sure it gets implemented; and 3. To add some whereas langauge, that explains WHY THE FUCK WE'RE DOING THIS and spells out what the expected effects are, so the public can hold Congress and the Executive accountable for the results.

NOTE Meanwhile, Krugman's observing radio silence. I bet that's going to be some column tomorrow.