Obama, Top Aides Lobby for Rest of Bailout Funds
Monday, January 12, 2009
President-elect Barack Obama and his team stepped up efforts yesterday to get Congress to approve spending the remaining $350 billion of the controversial $700 billion financial rescue package that was passed last year.
Former Treasury secretary Lawrence H. Summers, a top Obama economic aide, met with Democratic senators on Capitol Hill to encourage them to back the spending of the funds remaining in the Troubled Asset Relief Program and a separate stimulus package estimated at $800 billion. Obama said he and his team would soon detail plans to spend the $350 billion that would reassure Congress and the public that the rescue program could be effective.
"I think that we can gain -- regain the confidence of both Congress and the American people that this is not just money that is being given to banks without any strings attached and nobody knows what happens," Obama said in an interview aired yesterday on ABC's "This Week," "but rather that it is targeted very specifically at getting credit flowing again to businesses and families."
Bush administration officials, who have been talking with Obama's aides about the funds, could ask for the $350 billion as early as today.
But under the law, Congress can pass a provision stopping the president from spending the $350 billion within 15 days of him requesting such authority. If the president vetoes the legislation, Congress could still block the money if a two-thirds majority in both chambers vote against it. Members of both parties have complained about a lack of transparency in how the Bush administration has spent the first $350 billion, and many Democrats want the remaining funds to be used to help people facing foreclosure pay their mortgages.
With President Bush leaving office next week, Obama's team will administer much of the spending, so Obama aides are working with Congress to reach an agreement on how to spend the money and avoid Obama having to veto a bill sent by a Democratic-controlled Congress in his first week as president.
With much of the public frustrated with the spending of the first $350 billion, congressional officials say they expect the House to pass a resolution to block spending the rest of the funds. But Sen. Christopher J. Dodd (D-Conn.) said Senate Democrats could vote down the measure if Obama's team provides enough assurances that they will spend the money differently than the Bush administration did.
Obama signaled yesterday that he would adopt a different approach, saying, "What I've done is asked my team to come together, come up with a set of principles around how we are going to maintain transparency, what are we going to do in terms of housing, how are we going to target small businesses that are under an enormous business crunch."
Dodd, chairman of the Senate Banking, Housing and Urban Affairs Committee, suggested senators might want a signed agreement from Treasury Secretary-designate Timothy F. Geithner showing the program will be implemented differently. Other senators have different requests, including Bob Corker (R-Tenn.), who said he would be wary of funds being used to aid auto companies.
"If you get enough commitment from the Obama team, I don't think you need a bill," said Dodd, adding that it was unlikely the Senate would look to pass a bill laying out those assurances.
But House Minority Leader John A. Boehner (R-Ohio), who opposes spending the rest of the money, said the effort could still fail.
"Until there is a demonstrated need in our economy and a plan to address that need, I think it would be irresponsible for Congress to release the additional money," he said on CBS's "Face the Nation." "And I frankly think there are Democrats and Republicans alike who have great concerns about this. . . . So the president is going to have to hold a third of the Senate or a third of the House, have them in favor of this if that money is going to be released. And, at this point, I think that is going to be a pretty tough sell."
In his interview, Obama declined, as he has over the past two weeks, to comment directly on the ongoing fighting between Israel and Hamas. But in an indirect criticism of Bush, he said that it was "important for the United States to be engaged and involved immediately, not waiting until the end of their term," and that his administration would move quickly on a Middle East policy after Jan. 20.
On other foreign policy and national security matters, he reiterated his intention to "take a new approach" toward Iran, with an emphasis on "respect and . . . being willing to talk" while making clear that "we have certain expectations of how an international actor behaves."
He also repeated his intent to close the detention facility for terrorism suspects at Guantanamo Bay, Cuba, but he said that "it's going to take some time."
Staff writer Karen DeYoung contributed to this report.