Dems Fear Bush Will Tie Obama's Hands On TARP

There is increasingly anxiety among members of Congress and fiscal watchdogs over the handling of the Troubled Asset Relief Program by the Bush administration.

Beyond the specifics of the expenditures -- much of the first $350 billion, it appears, was geared towards propping up flagging banks rather than buying up bad mortgage debt -- the approach and breadth of them has also caused concern.

Josh Marshall, over at Talking Points Memo, has an interesting post up today on how the Feds have essentially turned over management of the TARP to financial firms, which, as he notes, "creates huge potential conflicts of interest and opportunities for self-dealing."

Meanwhile, a reliable and high-ranking Democratic official expressed concern to the Huffington Post that the second $350 billion in TARP money was "already committed and thus will not be available for the incoming administration." Obama, in essence, would not have the say to divvy up the funds in ways that he deemed fit because Hank Paulson and the Bush team had made pledges to spend the money.

Already, the Bush administration has dipped from the second tranche of TARP money when it agreed to lend General Motors another $4 billion, on top of additional loans. But this concern seems to be unfounded, at least at this juncture. Congress has to be alerted to expenditures coming from the second pool of $350 billion and they retain the ability to block such spending. President Bush could veto that decision, but the process will be public.

A spokesman for House Financial Services Committee Chair Barney Frank, meanwhile, said he did not "believe the Treasury was committing funds for the next 350 billion unless they are doing it with the express consultation with the Obama folks."

If they were, he added, it would make for bad policy because the incoming administration could simply reverse course. No commitments are etched in stone. "It wouldn't make political sense to make promises to people that you can't keep," he added.

And yet, his answer does lend itself to a broader concern: that there is simply too little information known, at this juncture, as to where the TARP funds are going and for what purpose.

Comments

[lunchlady]

Gee whiz, that's a lot of money. Why was Bush so adamant about no oversight for how the money got distributed? Does he still believe that anarchy works in the financial industry, even with so much money to be looted by the same crooks who already looted uncounted billions or trillions of dollars?
Deregulation (which seems more and more like a free for all) seemed to also include a huge coverup or group denial of the impending financial meltdown.

Will Bush make it hard for Obama to administer the TARP money? Of course he will. He feels like that's HIS money to spend or fritter away as he sees fit. What a great idea to do this huge emergency bailout, so interesting timed. The second half should have been officially apportioned for the new administration, or contingent on auditing where the first half went.

[BBackSoon]

I disagree. I think Bush is a petty little man and does not want his successor to outshine him. At some level he is a hardcore Right Wing Conservative and he really believes that we should let the Rich rape the population, the environment and the economy so he is leaving all these moles in the government and trying to muck up the water for his successor.

And then we are back to Bush knows he will be remembered as a horrible president. No matter what kind of media blitz and revisionist propaganda they produce he will not be remembered in a positive way. But he knows that if Obama comes in and is a Once in a Generation (Good) President, or even a Once in a Lifetime (Great) President he will be seen as even worse by comparison.

Sabatage is his only chance to salvage his legacy. And he will still be our generations Hoover.

[jesuslovesObama]

The photo at the top would be a great one for a caption contest.

[TerrapinCB]

Obama is thinking in the photo: Bush, you are one stupid MF, shut your mouth and get out of my house.

[Tiggy]

Congress wrote the bill and gave the treasury the power to handle the money. Congress has a way of pasturing to cover themselves yet giving the requesting party exactly what they wanted. Paulson came under fire for not buying the troubled assets and for not helping prevent future foreclosures and yet nothing has changed. The banks were given money to open up the liquidity, yet that has not happened. It is like when congress calls in the CEO's of the Oil company yet nothing changes. It is to make us citizens think they are actually doing something to benefit us. It is all a joke and the laugh is on us citizens.

[realpolitic]

Man, who would believe we trusted the Bush administration to dole out $350 illion responsibly after the fiasco of cost overruns without oversight in Iraq. Bush spends money like the son of a very rich man, which is what he is. His hatred of government keeps him from making sure government acts accountably. His mantra is "trust us" and then later "fooled you."

[SENATORCALLENBOWE]

YOU SHOULD MAKE A LAW ON EXCUSES :)

[Kartoffel]

The article is nonsense. Bush doesn't have the authority to tie up the next batch of TARP funds. The next administration can use as it sees fit, and no sane banker will count on TARP money from the 2nd $350 bill. just because it was promised by George W. Bush.

[Mnemanth]

Of course Bush is going to tie up the money. That's his retirement fund!!

[newsmctado]

"And yet, his answer does lend itself to a broader concern: that there is simply too little information known, at this juncture, as to where the TARP funds are going and for what purpose."
Really, you mean this financial bailout package isn't transparent enough? We dont know whats happening with this money, where its going, or hows its being spent once it gets there? My god, what PhD candidate finally put that groundbreaking piece of news together. Of course we dont know where these funds are going or how they are being used. The financial bailout package (ironically, made necessary by a lack or oversight and regulation) is one of the least regulated or overseen pieces of legislation ever written. Shocker!
To note, i'm a fairly young person (25) and my piece of advise to others my age or younger, start planning for the future now by putting every cent you can in the most secure and strongly insured accounts possible, because we are gonna be paying for this bailout package (ie. ridiculous salaries for Wall St.) for the next fifty years. Goodbye social security and pensions.

[vinny]

looks like babyboomers are going to use up everything and more...

[bboyy]

part of it went to bushes new dallas digs

[doctordoubt]

Someone has to pay for those gates.

[scooperss]

Simple.
Don't honor the bush pledges with the money. Tell the ones who it was pledged to that bush has a new address and let them know what it is.

Tell them now in fact so there will be NO misunderstanding.

[Hank10303]

All congress needs to do is stall the additional expenditure request for 5 days and then block it. The following week if Bush veto's it then it has to go back to congress to overide the veto which it should do. Then Bush will be out and the Obama adminstration can reallocate the funds. Now is the time for Reid to show he doesn't work for the President if ever.

[ema]

I thought the second half had to be approved by congress. This is criminal.

[BarackstarObama]

It does, the $350 billion will still be there when Obama takes over.

[Dystopic]

This is a scare tactic. Congress has control over whether that $ gets spent or not. It will be available for Obama when he takes office.

And yes, Boosh is criminal.

[bygollymissmolly]

Obama, in essence, would not have the say to divvy up the funds in ways that he deemed fit because Hank Paulson and the Bush team had made pledges to spend the money.
--------------------------
That second 350 billion was specifically put aside for Congress and the new President to handle. I fail to see how Obama will be under any obligation to honor any deals Hank Paulson and George Bush made with their fat cat friends.

[harriscrl3]

All the more reason to Prosecute Paulson for FRAUD. There has to be something in the Constitution that made what Paulson did ILLEGAL or Unconstitutional.

Carol

[Dystopic]

His very existence is un constitutional.

Nice thing is all pardons are public. If Boosh does not give him a blanket pardon, then in 2 years when we expand our majority even further, I think there will be a lot of trials and convictions. Anger hasn't really made it's appearance in the general public over the misdeeds and criminal activity. and coupled with a deepening recession ... Anger and convictions will come.

Hopefully in all of this Nancy and Reid will no longer be the leadership. No more wimps.

[KingPest05]

That's the Bush Adm. style. Most things they do are illegal and unconstitutional.

[swan1]

This should go to the housing , unemployment, small business