Obama announced last Monday that the second half of the $700 billion bailout fund would be utilized with specific consideration to the foreclosure crisis. Also, he said that his administration would be practicing utmost transparency and accountability in implementing the Troubled Asset Relief Program (TARP). However, he did not elaborate on how the money would be spent.
The President further said that his administration would focus on foreclosures, small businesses, and generation of jobs.
Last Monday, the team of Obama sent a letter to Congress mentioning the intentions of his administration. It was also stated that the cash was urgently needed.
During his last press conference, former President George Bush announced that TARP has served its purpose well and that he was pleased. It has unlocked jammed financial markets.
In contradiction, Obama said that the handling of the program was disappointing. There was no transparency and people did not know how the money was spent. Furthermore, the problems of housing and foreclosure were not clearly addressed.
Lawrence Summers, director of the National Economic Council under the administration of Obama, recently wrote a letter to Congress stating that transparency would be practiced in administering the TARP, although he did not state exactly how. He reiterated the statement of Obama saying that their administration will be confronting the housing and foreclosure crisis in the country.
A number of Democrat Senators imposed that the TARP fund should only be released when more strict limits and protections are implemented. Congress has the power to reject the request of Obama through a resolution that has to be passed within 15 days. However, such decision can be vetoed by the President.
Chairman Barney Frank of the House Financial Services Committee has proposed a legislation placing limits on the way the administration of Obama handles the TARP funds.
According to Summers, the administration of Obama is willing to work with Congress in helping the nation surpass the economic turmoil it is in right now, particularly the foreclosure crisis.
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