WASHINGTON — Senate Democrats prepared Sunday to answer a request for the remaining $350 billion in financial industry bailout funds as the Bush administration and President-elect Barack Obama undertook a tag-team effort to obtain the money from reluctant lawmakers.
A vote in Congress is likely as early as this week, several senators predicted after receiving a Sunday briefing from top Obama economic adviser Larry Summers on the Wall Street bailout, as well as on Obama’s separate $800 billion-or-so economic recovery plan.
President George W. Bush would request the additional money for the Troubled Asset Relief Program, or TARP, but the incoming administration would make the case for it by laying out a series of changes in how the program is run.
More of the money would go directly to relieve homeowners threatened with foreclosure, said Senate Banking Committee Chairman Christopher Dodd, D-Conn. A fuller accounting of the money already spent is needed as well, Dodd said.
“Larry Summers made a very strong argument for why it’s important and critical for the overall recovery,” said Sen. John Kerry, D-Mass. “And I think that’s an argument that most senators understand.”
Summers sought to win over Senate Democrats even as the GOP leader of the House, John Boehner of Ohio, warned that any effort to release the additional money would “be a pretty tough sell.” Boehner appeared on CBS’ “Face The Nation.”
A request would force a vote within days on whether to block the funding, but the deck is stacked in favor of Bush and Obama winning release of the remaining $350 billion. Congress can pass a resolution disapproving the request, but the White House could veto the resolution; then, just one-third of either chamber would be needed to uphold the veto and win release of the money. Senate leaders would prefer to win a majority vote, Dodd said.
The idea is to make the money available to the new administration shortly after Obama takes office Jan. 20. The unpopular bailout has featured unconditional infusions of money into financial institutions that have done little to reveal what they’ve done with it.
The Congressional Oversight Panel raised detailed questions last week about how banks are spending the first $350 billion, how the money will combat the rising tide of home foreclosures and Treasury’s overall strategy for the rescue. In instance after instance, the panel said, the Treasury Department did not offer adequate responses.
In an interview aired Sunday on ABC’s “This Week,” Obama said he has asked his economic team to develop a set of principles to ensure more openness about how the money is spent. Under consideration by Obama aides and congressional Democrats are proposals to limit executive pay at institutions that receive the money and to force such institutions to get rid of any private aircraft they may own or lease.
Work continued through the weekend on Obama’s economic recovery plan, which features aid to cash-strapped state governments, $500-$1,000 tax cuts for most workers and working couples, and a huge spending package blending old-fashioned public works projects with aid to the poor and unemployed and a variety of other initiatives.
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