Archive for category Politics
Republicans Urge Delay in Release of Remaining Bailout Cash
Posted by admin in Mixed Economy, Politics on January 13th, 2009
FOXnews.com
Tuesday, January 13, 2009
Republicans on the House Financial Services Committee urged Democratic Chairman Barney Frank on Monday night “in the strongest possible terms” to postpone a debate and vote to release the second half of the $700 billion financial bailout package.
President Bush on Monday sent a request for the $350 billion to Congress on behalf of the incoming administration. Senate leaders were hoping to vote later this week on the financial bailout package, which President-elect Barack Obama is seeking.
“Karl Marx famously observed that history repeats itself, first as tragedy and then as farce,” GOP lawmakers said in a letter to Frank. “And it appears this Congress is trying to prove Marx correct. The original TARP was considered and enacted in a panicked rush to judgment. We are again moving far too quickly in considering whether to approve the expenditure of hundreds of billions of taxpayer dollars.”
Sources told FOX News that Senate leaders are hoping to call a vote on the measure some time between Thursday and Saturday, though it’s unclear whether Obama’s request would be approved. Only one chamber of Congress needs to approve the funding.
Administration officials made clear that Obama, who would be spending the money, will also have to make the case for it.
“The best course of action, of course, is to convince enough members of the Senate to vote positively for the request,” Bush told reporters Monday morning.
Congress has 15 days to act once the formal request is made.
The process for approving the money is complicated, and would require lawmakers supportive of Obama’s request to vote against the measure that comes to the floor — called a motion of disapproval. If they vote against the measure, the Obama White House gets the money. If they vote for the measure, then they are denying Obama that money.
Opponents to the release of the money would need 60 votes to deny the funds, and several sources said that seems achievable.
But they would ultimately need 67 votes to override a likely presidential veto, which would be tougher. In other words, supporters of Obama’s request need only round up one-third of the Senate to approve the money.
Obama’s pick for treasury secretary, Timothy Geithner, has been working with Senate Banking Committee Chairman Chris Dodd, D-Conn., on ways to reshape the program and in turn generate more support for the proposal.
The unpopular bailout has so far featured unconditional infusions of money into financial institutions that have done little to account for it.
Republicans in both chambers are skeptical about the second half of the bailout money, particularly because they think the recent use of some funding to bail out the auto industry signaled that the money is heading toward those with political clout rather than struggling financial institutions.
House Republican Leader John Boehner said it would be “irresponsible” of Congress to release any more money. George Rep. Tom Price, chairman of the Republican Study Committee, said in a written statement that the request for the funding is “troubling and disappointing.”
But Obama at least has the support of the top Republican on the Senate Budget Committee, New Hampshire Sen. Judd Gregg. Gregg told FOX News he feels “very strongly that they need this resource,” though he acknowledged that many lawmakers are “disgruntled” with the package so far.
House Speaker Nancy Pelosi released a statement Monday saying the House will vote this week on separate legislation from Rep. Barney Frank, D-Mass., ensuring more accountability to the distribution of the money.
But that could be a symbolic vote, since Obama might already have the bailout money by the time such legislation moved to the Senate — if it moved to the Senate.
Rather, Democrats are seeking a “letter of assurances” from Obama’s economic team spelling out conditions they will impose on the rest of the bailout money by the time the measure comes up for a vote.
Obama’s transition team on Monday released a letter addressing several of these provisions. The team sent the letter to Democratic and Republican lawmakers spelling out reforms that the president-elect intends to make for the distribution of the second half of the funding.
Obama economic adviser Larry Summers wrote in the letter that the bailout prevented a “crisis” from becoming a “catastrophe,” but that Americans have become “angry” after seeing too little effect from the plan on jobs, incomes and home-ownership. He also wrote that the process has not been transparent.
“That will change when President-elect Obama takes office,” Summers wrote.
Summers pledged to increase oversight of the distribution and ensure a “full and accurate accounting” of the money. He pledged that the administration would help restart lending, address the foreclosure crisis better, encourage private investment over public funding and impose “tough and transparent” conditions on firms receiving the money. Those would include limits on executive compensation and dividend payments.
Summers plans to return to the Senate for another round of meetings Tuesday with Senate Democrats on the finance committee, sources told FOX News.
FOX News’ Jim Angle, Trish Turner, Chad Pergram and The Associated Press contributed to this report.
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Will Obama handle bailout fund better than Bush did?
By Jim Puzzanghera and Peter Nicholas
Los Angeles Times
Posted: 01/12/2009 07:53:42 PM PST
WASHINGTON — In formally asking Monday for the release of the second half of the $700 billion financial bailout fund, President-elect Barack Obama is promising Congress he will do a better job than President George W. Bush in using the money to help average Americans.
“We’re going to focus on housing and foreclosures. We’re going to focus on small businesses,” Obama told reporters Monday. “We’re going to focus on what’s required to make sure that credit is flowing to consumers and businesses to create jobs in the United States.”
Transition officials also said Monday that Obama plans to issue an executive order on his first full day in office ordering the closing of the Guantanamo Bay detention camp.
But experts say it is likely to take the administration many months, perhaps as long as a year, to empty the prison that has drawn international criticism since it received its first prisoners seven years ago this week.
Obama’s first priority Monday, after asking Bush to make the official request to Congress for the remaining $350 billion left in the bailout fund, was to help smooth over strong resentment on Capitol Hill about the Troubled Assets Relief Program, or TARP. Many Democrats and Republicans say they were misled by Treasury Secretary Henry Paulson about how the first $350 billion would be spent. Democrats are particularly angry that none of the money has gone to help homeowners facing foreclosure.
“People feel they got burned up here by the current administration,” said Senate Budget Committee Chairman Kent Conrad, D-N.D. “I understand the need for the money to be released. I also feel very strongly it’s got to be conditioned in a way to avoid what I see are the abuses by the administration in the handling of the first” half.
The Democratic-controlled Congress is unlikely to block the request. But Obama is seeking to avoid a confrontation over economic recovery spending that could spill into his push for an approximately $800 billion stimulus package. Congress has 15 days to reject the request, but efforts were afoot to have the money available for Obama sooner.
Lawrence Summers, whom Obama has chosen to head his National Economic Council, promised in a three-page letter to congressional leaders Monday that the new administration would “act both quickly and wisely.” He broadly outlined the changes that Obama is planning for the second part of the fund, including more transparency in how the money is spent and “a sweeping effort” to reduce foreclosures.
“We cannot allow the failures of the past to prevent us from doing what we must to secure America’s future,” Summers wrote to House Speaker Nancy Pelosi, D-Calif., House Minority Leader John Boehner, R-Ohio, Senate Majority Leader Harry Reid, D-Nev.. and Senate Minority Leader Mitch McConnell, R-Ky.
Obama worked behind the scenes to soothe lawmakers. On Monday morning, for example, he twice phoned Sen. Barbara Boxer, D-Calif., who does not even serve on any of the relevant committees. Boxer, like many senators and representatives, has been upset with the bailout fund’s administration.
“I don’t like the way Paulson handled this. And I said if we don’t get involved in trying to solve this housing crisis then we’re never going to” alleviate the problem, Boxer said she told Obama after leaving a meeting with reporters in her office two times to field Obama’s calls.
“He agreed with that. … He’s going to lay out what he feels the money is needed for, and that (housing) would be one of the things it’s needed for.”
Boxer said she wants Obama to make those commitments publicly.
House Financial Services Committee Chairman Barney Frank, D-Mass., will hold a hearing today on legislation that would force major changes in the TARP program, including a requirement that $40 billion to $100 billion of the remaining money be used to revise existing mortgages to avoid foreclosures. In introducing the bill Friday, he said Democrats “intend to trust, but verify” Obama’s use of the final $350 billion in the fund.
Frank said Monday that the money “could be made available under the appropriate conditions” and that Obama seems to agree with his proposals.
Boehner and some other Republicans said Monday they would oppose releasing the final half of the bailout fund. But Reid and Pelosi indicated they were willing to work with Obama to release the money.
Obama has said he shares congressional anger over the Bush administration’s handling of the TARP money. But he said he needs access to the remaining $350 billion so as to be able to respond quickly to any new crises.
“It is clear that the financial system, although improved from where it was in September, is still fragile and I felt that it would be irresponsible for me . . . to enter into the administration without any potential ammunition should there be some sort of emergency or weakening of the financial system,” Obama told reporters Monday.
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