The economic rescue package just signed into law looms large as a transition challenge for the incoming president. 

Both candidates supported the legislation, so both must be prepared to live with it should he become president.

 

Because leadership in the Senate larded up the bailout parts of the legislation with tax and health benefits—the sweeteners—the bill has something for nearly every department in the executive branch.

 

The big roles, those concerned with the acquisition of so-called toxic assets and the whole galaxy of oversight that goes with it, fall on Treasury, Federal Deposit Insurance Corp. and the Securities and Exchange Commission. So one interesting question is this: Would either John McCain or Barack Obama consider retaining Treasury Secretary Henry Paulson, at least for a couple of years, to make sure the rescue plan is implemented as everyone envisions? What about FDIC chairwoman Sheila Bair?

 

It’s an odd turn of events in that most of the speculation has been on Homeland Security, which has made a great show of its transition planning. But the staid and dull Treasury has emerged as the most critical department going into transition. Unless the next administration keeps Paulson, the rescue process of buying and selling the mortgage securities will be particularly challenging, like a relief pitcher coming into a game in the 2^nd inning facing loaded bases, no one out and the fat part of the order.

 

Other agencies that are busy because of the bailout include the FDIC, at the moment figuring out how it will raise its reserves to the minimum necessary to insure $250,000 deposits. Also the SEC, which is tasked with studying possible changes in asset accounting rules. This occurs even as the SEC wonders whether it will survive the re-regulatory fever gripping Capitol Hill.

 

Don’t forget to feel sorry for the IRS. Its IT staff must undertake extensive reprogramming of agency systems to account for all the new tax changes included in the economic rescue bill—presuming the managers can figure them all out.

 

Maybe because they can’t ever resist, lawmakers added provisions for mental health to the bill. That means Health and Human Services and the Social Security Administration have to develop new standards and rules for the providers of this type of care. That includes a ban on discrimination based on genetics. The Labor Department gets the job of auditing health plans to make sure they comply.

 

Energy, EPA and Transportation will be involved in rulemaking for energy tax provisions that extend even to the Chevrolet Volt, a super-hybrid car not even yet on the market.

 

Far from being merely a rescue bill, the Emergency Economic Stabilization Act of 2008 is an omnibus that involves large swatches of the federal government and presents new work for the next administration.