The outgoing Bush administration may request Congress to release the second half of the $700 billion Troubled Asset Relief Program fund allocated by Congress in October 2008 to help contain economic problems, especially foreclosure troubles.
President Bush could spend the remaining funds to shore up his Treasury Secretary’s economic programs or he could simply make the congressional request as part of his last significant actions in the White House and as a goodwill gesture towards his successor, Barack Obama.
According to Democratic sources, several Democratic senators met with President-elect Obama’s economic advisers and agreed with one another that they can launch a more effective program if they had the remaining $350 billion ready for disposal. Senate Banking Committee Chairman Christopher Dodd said that any economic recovery program to be devised under Obama’s administration should be managed better than previous efforts.
During the last months of 2008, majority of legislators got disappointed at how Treasury Secretary Paulson used the first $350 billion of the TARP fund. Most everybody expected him to focus first on foreclosure prevention efforts to keep Americans in their homes. He instead poured most of the funds to prop up the balances of big financial institutions.
Timothy Geithner, nominated by Obama to succeed Paulson, said he has been working on ways to modify TARP to allocate money to help homeowners in danger of foreclosure and to help small businesses, local government units and consumers with extreme financial difficulties.
Meanwhile, Frank Barney of the House Financial Services Committee, has introduced legislation that would require the Treasury to spend a large part of the $350 billion remaining fund to help Americans at risk of foreclosure and to clean up neighborhoods blighted with foreclosed properties.
In support of Frank’s efforts, leading Democrats warned Treasury officials that they would release the second half of the $700 billion funding only if Treasury guaranteed they would use a large part of the money to help homeowners troubled by foreclosures.
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