What's good for General Motors is good for Wall Street.
That's the argument being made by House Financial Services Chairman Barney Frank (D-Mass.), who is using Republicans' own arguments from the auto-bailout debate to push for tighter oversight of the second $350 billion of TARP funds intended for the financial sector.
Frank's bill, which he plans to hold a hearing for on Tuesday, rips more than a few pages out of the GOP's automaker bailout plan.
Big Three CEOs need to give up their private planes? Then so do bankers.
Automakers are required to make quarterly reports to Congress regarding use of the money? Then so is Wall Street.
Detroit needs to meet benchmarks agreed to by Washington? Then so do the bankers.
The car companies can't use the money for a merger? Well then neither can the banks.
An outline of Frank's bill explicitly refers to the auto bailout bill when it references executive pay, saying that Frank's version "applies the executive compensation requirements included in auto bill to any new receipt of TARP funds." The compensation limits on auto executives had real teeth; the original TARP rules did not.
"The standards we used for the automobile people were tougher than the original" TARP standards, said Frank. "They'll be applied."
The bill also "clarifies" that auto companies are eligible to receive a portion of the TARP funds.
That the GOP push for tighter regulation of Detroit than it wanted for Wall Street reflects the longstanding political alliances of the two industries -- and particularly the influence of the Democratic-allied United Auto Workers. (It also reflects the national spasm of outrage that centered on the auto-executives' ill-fated decision to fly in private jets to Washington looking for a bailout.)
The rest of Frank's bill pushes priorities that Democrats couldn't get included last time. Frank wants at least $40 billion of the TARP cash to be spent on foreclosure relief - and up to $100 billion unless the banks can show why that much wasn't needed.
"It was inexplicable to me not spending any of the money of foreclosure," said Frank. Without a specific directive in the original bill, Congress couldn't force the administration's hand with the first half.
"The problem that we have is that in the legislative branch it's easier to prevent people from doing bad things than make them do good things," he offered.
If Bush does ask for the second half of the TARP funds before leaving office, Frank noted, the president won't have time to use the money. "The Bush Administration can ask for the second 350," he said. "At this point the Bush Administration could not spend it because it wouldn't ripen for fifteen days."
Congress has that much time to deliberate over a presidential request, which Bush has yet to make formally. Obama will be president within that amount of time.
Such a request from Bush, then, would set up an unusual clash, with President Bush and President-elect Obama in coordination on one side and congressional Democrats on the other.
The very fact that there could be an executive-legislative tug-of-war differs markedly from the early years of the Bush Administration and is evidence, said Frank, that Congress was correct to divvy the money out in separate tranches.
"A number of people said that was window dressing and obviously they were wrong. The idea we had of letting them do half and then waiting has worked out. And we intend to say that if they are going to spend the second 350 - and I think they should; I think there's a need for it in the economy - it will be done in a reasonable way," said Frank.
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