How is the Federal Government financial rescue package progressing?

The US Government's $700 billion financial rescue effort is only a few weeks old - but word is getting around that it's already morphed into something far broader and more ambitious than its original intent.

The speed and severity of the nation's economic problems simply may have forced it to change. First, the Treasury added direct investment in banks to its plan to buy up troubled mortgage-based assets. Second, it now seems primed to partially guarantee some home mortgages in an effort to stem a rush of foreclosures sweeping through US neighborhoods.

Further modifications could be coming. Insurance companies and auto firms are also arguing that their credit arms are vital financial institutions now suffering from a cash-flow crisis and they want some of the bail-out money. Other industries may seek to be included, particularly if Congress holds a post-election, lame-duck session to consider additional moves.

The federal government in fact may still be able to set limits on who/what needs to be rescued. But in any case, with all of the financial turmoil, a $700 billion commitment that seemed large at the beginning of the month appears smaller at the end.

At a recent Senate Banking Committee hearing, a Treasury official overseeing the bailout, said the US remains committed to the plan's first intention - the purchase of bad mortgage-based securities that are cluttering the books of financial institutions.

While the Treasury hasn't actually bought any bad loans yet, it has moved ahead with an infusion of cash into the nation's nine largest banks with an additional 20 smaller regional banks slated to receive government money.

One story making the news is about some of these banks using its new government cash to buy other banks or to pay dividends to investors or executive bonuses. While these uses are allowed under rescue bill provisions, questions are coming forth whether they'll help jump-start lending to cash-starved US businesses.

What are your thoughts on the progress of the Emergency Economic Recovery Act?