President-elect Barack Obama made his first veto threat Tuesday in a closed-door meeting with Senate Democrats. Obama told his former colleagues that if Congress passes a resolution blocking release of the second half of the financial bailout funds he will veto it, said Sen. Joseph Lieberman after leaving the caucus meeting.
Until today, an Obama veto of a so-called disapproval resolution had been discussed as a theoretical possibility. But the promise made to the Democratic caucus represents a firm stand on behalf of an extension of the $350 billion in Troubled Assets Relief Program (TARP) funds.
The original TARP legislation required the president to specifically request the second half of the funds. Congress then has fifteen days to disapprove of the request or else the money is dispersed. If Obama vetoes the disapproval, Congress would need a two-thirds majority to override that veto to prevent the money from being spent.
"I was glad that he said that," said Lieberman, an independent who still caucuses with Democrats, of the veto threat. "He made an appeal," he said, arguing that Obama "really needs this extension of the TARP money."
Obama told the caucus, according to Lieberman, that he expected to have the funds by the Presidents Day recess in February. Speaker Nancy Pelosi has also set the recess as a goal, saying that if the deadline wasn't met, there would be no recess.
Obama spoke for about fifteen minutes and then spent much of the rest of the hour-plus meeting answering questions. Sen. John Kerry (D-Mass.) spoke on behalf of increased spending on energy independence and alternative energy as a way to stimulate the economy. "You add up all the benefits of it and it's really quite extraordinary," said Kerry.
A Senate leadership aide said he expects the package to be voted on Friday and doesn't expect it to drag in to the weekend, noting that Senators will have family in town for the inauguration and are less than enthusiastic about coming in to work.
Sen. Claire McCaskill (D-Mo.), a top Obama surrogate during the campaign, said that Obama repeatedly stressed the urgency of getting access to the TARP funds quickly and spent the bulk of the meeting on the subject. "The single message that was most consistent was that time is of the essence. There's a sense of urgency," she said.
Because of that urgency, McCaskill said, Obama told the group that he understood that the Senate may not have the time it needs to develop a proper oversight package. He asked his former colleagues not to let that slow down the release of the funds, promising to conduct the oversight they expect and operate with transparency.
GOP senators said Tuesday they were not enthusiastic about releasing the second half of the funds. Maine Republican Susan Collins said she is undecided, but that, "Right now, I'd have a lot of reservations about approving any more funding."
If Congress releases the funds without a new oversight bill, it will rely on a gentleman's agreement of sort between congressional Democrats and Obama. The framework for such an agreement was debated in a House Financial Services Committee hearing Tuesday. "This is a 'trust but verify' bill," said committee chairman Barny Frank (D-Mass.).
McCaskill, though, said she thinks Obama may get enough votes out of the Senate to approve the funds, obviating a veto. "We didn't take a caucus vote, but he needs fifty votes out of the caucus. I'd be shocked if he didn't get it," she said.