Bush Prepares Request for Rest Of Bailout Funds
Saturday, January 10, 2009
Senior Bush administration officials, consulting with the Obama transition team, have prepared a plan to ask lawmakers for the second half of the $700 billion financial rescue package despite intense opposition in Congress, sources familiar with the discussions said.
The initiative could create an unusual political scenario straddling the Bush and Obama administrations. If Congress were to vote down the measure, either President Bush or Obama would have to exercise a veto to get the money.
Obama officials would prefer that Bush exercise any veto rather than leave the new president with the unsavory task of rebuffing his fellow Democrats in Congress to advance a widely unpopular program, sources said. The White House has declined to say publicly whether Bush would be willing to issue the veto.
"There have been discussions between the administration and the transition team on how to proceed should the president-elect determine that he would like President Bush to notify Congress on his behalf of the intent to use the remaining $350 billion so that it will be available early in the new administration," White House press secretary Dana Perino said. "No final decisions have been made."
But Democratic Senate aides were notified in a meeting yesterday afternoon that the request could come as soon as this weekend and that a vote could be held as early as next week, said congressional sources, who spoke on the condition of anonymity because no decisions have been made.
Under the emergency rescue legislation approved by Congress in October, the administration must inform lawmakers that it wants access to the second installment of $350 billion. Unless Congress passes a resolution rejecting the request within 15 days, the Treasury can begin to tap the funds. If Congress turns down the request, the president could veto the resolution and then the Treasury could proceed. The money would be blocked only if Congress overrides the veto, which would require a two-thirds majority in both chambers.
A congressional source said advocates of the plan are exploring whether there are enough votes in the Senate to sustain a veto. The first $350 billion has already been committed.
"There have been discussions between the administration and the transition about how to proceed should the president-elect determine that he wants to have those funds available on January 20," said Robert Gibbs, spokesman for President-elect Barack Obama's transition team. "No final decisions have been made, but we want to be ready to act if needed."
Both Bush and Obama officials say gaining access to the balance of the rescue funds is crucial to turning the economy around. Without the money, it would be nearly impossible to offer significant help for homeowners facing foreclosure, stabilize the financial system or jump-start the credit markets so more consumers and companies can get loans. The latest sign of the economy's deep malaise was new jobless figures released yesterday showing that unemployment has soared to 7.2 percent, the highest rate in 15 years. (See story on page D1.)
Even as senior Bush and Obama officials consulted about how to access the rest of the money, Rep. Barney Frank (D-Mass.), chairman of the House Financial Services Committee, unveiled a bill on Capitol Hill aimed at forcing the Treasury to use the money in accordance with lawmakers' wishes.
Many of the measure's provisions are being coordinated with Treasury Secretary nominee Timothy F. Geithner, who is planning to expand the scope of the rescue program well beyond the financial system to help ordinary consumers and homeowners, as well small businesses and municipalities. Frank said in a news conference yesterday that his bill might not be needed if the Obama administration promised to abide by its principles.
"It doesn't have to be enacted. It would be helpful if it was," Frank said. "We have smart and cooperative people in this [incoming] administration, I'm willing to accept their word that they will act as if it were the law."