Obama's First Vote: $350 Bailout Funds

WASHINGTON — Seeking an early legislative victory, President-elect Barack Obama prevailed Thursday despite eroding Senate support for the financial bailout fund he wanted to tap.

Amid the drama was a sense of celebration and nostalgia. The vote was the first for new Sen. Roland Burris, Obama's Democratic successor in Illinois, and the last for the vice president-elect, Sen. Joe Biden, D-Del.

There was urgency, too.

Acting on Obama's behalf, President George W. Bush on Monday asked for release of the unspent $350 billion in the fund, known as the Troubled Asset Relief Program, or TARP. Congress had 15 days to act if it was to block the request.

The appeal came with the program at perhaps its most unpopular on Capitol Hill. As a result, Obama had little time to secure votes in a test of wills even before his swearing-in Tuesday.

The Senate last fall voted 74-25 in favor of setting up the $700 billion fund. On Thursday, the vote was 52-42 to turn back an effort to block the remaining money in the pot from being spent.

There was public opposition to the bailout. More senators face re-election in 2010. And many are unhappy with the way the Bush administration has handled the first half of the fund.

Complicating the vote were Senate absences and the looming retirements of three senators who are joining the Obama administration. In fact, Biden resigned his seat at 5 p.m., shortly after the vote. The other two are Sen. Hillary Rodham Clinton, D-N.Y., in line to be secretary of state, and Sen. Ken Salazar, D-Colo., Obama's pick for interior secretary.

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"I feel like I've been TARPed and feathered," Sen. Dick Durbin of Illinois, the second ranking Democrat, joked as the vote drew near.

"We have senators being sworn in, we have senator leaving. Some not here. There are variables I've never had to deal with before."

Sens. Orrin Hatch, R-Utah, and Jon Tester, D-Mont., did not vote in an arranged plan to neutralize the absences of Sens. Edward Kennedy, D-Mass., and Sherrod Brown, D-Ohio. Brown and Kennedy would have voted to release the money; Tester and Hatch would have voted to block it.

Six Republicans, including two members of the GOP leadership, joined 45 Democrats and one independent to support Obama's position. Eight Democrats, one independent and 33 Republicans voted to block the funds. Six of the Democrats opposed to the idea had voted against the bailout in the fall and were joined by Sens. Blanche Lincoln of Arkansas and Evan Bayh of Indiana, both of whom are up for re-election in 2010.

Among the Republicans voting to block the funds was Sen. John McCain, who vigorously supported the original bailout program as Republican presidential candidate last fall. Indeed, Republicans, 34 of whom had voted for the bailout in October, turned decisively against it. They objected when the current administration shifted from buying sour assets from financial institutions to directly injecting capital into banks. They also opposed using the money to help the auto industry, a step Bush took reluctantly after Congress refused.

In a last-ditch effort to win votes, Obama's top economic adviser, Larry Summers, said the incoming administration would spend between $50 billion and $100 billion to get control over rising foreclosures. Summers also said Obama has "no intention of using any funds to implement an industrial policy" _ a reference to the auto aid. "Our actions will reflect the act's original purpose of preventing systemic consequences in the financial and housing markets," Summers wrote.

The vote coincided with a worsening climate for the nation's banks. But lawmakers have heard loud protests from constituents. Sen. Claire McCaskill, a moderate Democrat from Missouri, said she applies a grocery store test to constituent worries: "How many aisles can I get down the grocery story without people yelling at me.

"By far the financial rescue bailout is at the top of the hit parade," she said. "I couldn't even get to the produce section."

She ended up voting to let Obama spend the money.

Comments

[Mildmannered]

what do those who oppose the fund propose that we do to fix the economy?

[1murillo]

Business plans, even from institutions that have already received funds, are needed to assure that monies are used to develop and support regional banks and homeowners. All banks related to a government loaned entity must comply. If a bank is willing to refuse government money - and refuse partnership with any institution that has accepted govt aid - at this time then that institution is truly trying to go bankrupt.

The government can use more than money to effect change. Vouchers for future tax reductions, credit card percentage controls, down payment vouchers for those not receiving loan aid, etc.

[1murillo]

Simple comment on Congress v the President: it's encouraging that Congress is stepping into its role; it's still working with the incoming president, but it doesn't want to get shoved around by a Democrat as it did under GWB.

The idea that we're rewarding 'irresponsible' people that have screwed up is short-sighted. While it's true you don't want to pay someone for doing more insufficient work, there's no reason to give money to the banks or homeowners who are doing well.

The solution is to target funds to the regional banks and homeowners that are on the brink - this side or the other - to loan them money to stay in business/their homes. It's better to loan money - probably lose some - to a single-home owner than an owner of multiple homes and businesses.

The idea isn't to reward poor planning, but to use our funds in ways to keep people in their homes in order for our economy to get back on track.

For those saying, "What about me?" a small amount of the money should be devoted to a "Credit for brave actions" department, where vouchers for - future - tax reductions, college payments, children's home down payment, promised credit card percentage reduction, etc. could be issued so that everyone may get some assistance.

The goal is to have monies distributed throughout the year, and with an allotted vestiture (wd?) period so we can plan our future with a semblance of security.

[StacyLA22]

I find it baffling that Republicans and Democrats rolled over for the past eight years and now suddenly want to push back...especially, the Dem's. Why do they want to flex their muscle now? I think it's because Obama has given them a courage pill. Give Obama the chance to implement his plan and I hope we will pass his stimulus plan even if it's a partisan vote. Turnabout is fair play when it's in the interest of the American people.Yes, he will make some mistakes but I think when that happens he will work fast to fix it. I also like someone's idea that if a bank gets TARP money they should lower their credit card interest rates from 25+% to 5%.

[TylerRose]

It seems to me the solution to the first release Tarp funds is simple. Make the banks who received the money show how the money was spent - especially for the people. If they cannot show the money was spent for the people, then make them give the money back to the government. Remember, we the people are in power now. All of us citizens need to send a message to congress to make the banks return the money they received since then did not use it for the people. Once congress make that demand, I bet the banks will start using the money they already got on the citizens and provide accountability of the money they received.

As for the second part of the money. Since there are congressmen up there wanting to vote against this money which hurts the citizens. I want those votes made public so the citizens can see how their representative voted on their behalf. I am trying to find the website created by Obama/Biden where we citizens can send our 2 cents worth. If anyone knows the website, please share. Thanks.

[bygollymissmolly]

The Republicans just don't get it that Obama is nothing like Bush. There's no way he would give that money away with no conditions, hide who got it and ignore oversight.

The Republicans who vote against this bill will be doing so simply to score points. They could care less about main street and what it needs.

[Changeizgood]

On the list for removal by vote is a site to bring forth the gridlockers, to the American public, and get these monkey wrenches out of our tech machine for progress.

Kevin McCarthy R CA I don't know whether he's bucking for position and wants to put himself up front to the current leaders of the party, but Kevin Dear, you party screwed us for 12 years, actually since Reagan.
We the People have voted to not be screwed again, and put the Dems in charge, because they stand for the PEOPLE, you guys socialized the Debt of Wall Street Bankers, a few million for arrows, and other little diddies, NO oversight. Gave Bush, Paulson and the Minnie Me KashandKari it, off in the sunset.

Well We the People made our decision, please take a seat, while the vehicle is moving. We are driving this ship and have take the keys from Bush who moves so slow in emergencies, you might as well bring a priest or a casket.

Your party had twenty years to come up with something other than "tinkling down our necks and telling US it's rain.

The American Blue Tsunami of Change has spoken, since 2004, and we will not be stopped in the "IMMEDIATE REPAIR AND FORWARD THINKING" FOR THIS COUNTRY.

MOVE! GET OUT THE WAY. YOU CAN'T LEAD, WON'T FOLLOW, YOUR PARTY IS A BLANK MAP.

Going nowhere and dragging your feet on the way!

[Allamr18]

To Quote a gospel song by a group named Mary Mary, "Nobody told me that the road would be easy and i dont believe he got me this far to leave me" and MLK "If you can't fly, run. If you can't run, walk.If you can't walk,crawl,but by all means keep moving." The challenges we face as a nation despite the epic election will not be easy, but weve gotten this far and the nation must face these challenges together. By any means we must get there flying running walking or crawling get there. So theres my barack obama moment of inspiration lol