Bailout Opposition Mounts as Obama Requests Funds

by Paul Kiel, ProPublica

The incoming Obama administration has launched an “aggressive campaign” to release the second installment of bailout funds, the Washington Post reports. Given widespread criticism from both right and left over how the Bush administration has handled the first $350 billion, opposition is to be expected.

But the real uphill battle is for those opposing the bailout and not the Obama team. According to the $700 billion TARP bill passed in October, the president must request the release of the second half of the funds, which then triggers a 15-day window during which Congress must pass a resolution in order to block it. The vote needs a simple majority in the House and 50 votes in the Senate to pass. But even if that resolution passes, the president can still veto it. In order to override the veto, both houses would need a supermajority.

As a result, only near unanimous opposition in the Congress could effectively block the second $350 billion. And already, the New York Times reports, the winds seem to be blowing Obama’s way, with the Democratic congressional leadership and even a Senate Republican already indicating support.

But the vote could be close. (The Times, Post, and Wall Street Journal all say a vote could come as early as Thursday or Friday). House and Senate Republicans have both come out against releasing the money, and Democrats have been making skeptical noises. Senate Majority Leader Harry Reid’s (D-NV) spokesman tells the Post, "We're still unsure of where the votes are, but we're working hard on that right now.”

There seems to be a consensus that the Obama team needs to be more specific about how the funds will be used than they were in yesterday’s vague letter. “I'm persuadable to the extent that somebody's got a plan and an idea of how it's going to be administered,” Sen. Blanche Lincoln (D-AR) tells the Post.

But just how specific Obama’s team will get isn’t clear yet. Rep. Barney Frank (D-MA) has introduced legislation in the House that is long on specifics: It requires that at least $40 billion of the $350 billion be spent on foreclosure relief and institutions that get bailout money issue public quarterly reports on what they’ve done with it. House Speaker Nancy Pelosi (D-CA) has said that she’ll bring that bill to a vote this week, but Roll Call reports that the bill is unlikely to get a vote in the Senate and “could serve as a fig leaf for House Democrats nervous about a public backlash against Wall Street bailouts.”

We’ll keep you updated as the next chapter in the bailout plays out.

Paul Kiel is a reporter for ProPublica, America's largest investigative newsroom.

Comments

[Oldtimer]

Obama's pick for Treasury sure is dubious as commenters rightly point out.
I think Obama needs to stop reading Lincoln and start reading Roosevelt - Teddy that is.
Teddy came in after McKinley (as freindly to big business as Bush) and made a
monumental change by challenging the "Trusts". Somebody had to show that it could be
done, that government under the right hands does have the power to do the PEOPLE'S
business. This my fellow Huff Posters and commenters is precisely what Obama needs
to address in his Inaugural. His theme should be the PEOPLES BUSINESS. That should
be the title. What more change can there be but actually doing the PEOPLES business instead
of the fat cats business, the crook's, the insiders, the big donors business, big oil and the
military industrial complex?? How about addressing PEOPLE's business?? Banks need to be
smaller not bigger to do Main Street business and credit card rates should be capped at 18%.
This one change alone would put Obama on Mount Rushmore. Washington cared for people.
Jefferson, Lincoln and Teddy all did something for the masses. That's what makes Rushmore.
Obama has to be bold. If he triangulates, if he does not challenge like an RFK he is doomed.
He must be bold in his call to challenge like Kennedy's moonshot. If he doesn't he's been bought.

[StephanCotton]

As they debate the bailout, Congress should ask the fundamental questions Are the banks salvageable and Are they worth saving? After years of their predatory behavior and recent months of pocketing public funds without any significant increase in lending, the answer is beginning to appear to be no.

The fundamental objective should be to restart the economy and keep the nation's businesses functioning. Saving bankers doesn't appear to be helping.

Maybe we should consider disintermediation and move toward direct lending to businesses and home buyers through the SBA and FHA.

[mikekopac]

He must have known what he earned, how could he not know that the taxes were not deducted?

[VikingQuest]

It should mount even more now that we know the guy taking Paulson's position doesn't pay his own taxes.

Nothing says smart guy in charge of the Treasury like failing to pay taxes :)

[oldGunny]

"He paid $25,970 in taxes and interest for those years several days before Obama announced his nomination, the transition official said."

Without the nomination, would he have ever paid?

[Poboy]

Treasury?

How about also being in charge of the IRS (Internal Revenue Service.)