House Rejects Obama's Request For Rest Of TARP
The House expressed its bipartisan anger over a massive financial bailout package Thursday as the Obama administration undertook to assure lawmakers that it would spend the remaining money prudently and with greater oversight than the Bush administration.
In a symbolic vote, the House voted to reject President Barack Obama's request for the unspent $350 billion in a bailout fund for the financial sector. The 270-155 tally was a moot point because the Senate had refused to block the release of the money last week. That effectively made it available to the new administration.
The vote let Obama know that in seeking to shore up a shaky financial sector, he, like Bush before him, is operating on shaky political ground, even as the weakened banking industry continues to roil the stock markets.
Eager to signal a change, the Obama administration promised to force bankers to report their lending activity on a quarterly basis and to meet tougher executive pay requirements. From the podium of the White House briefing room and in written responses to senators, Obama officials pledged to ensure that the money is used to extend credit to small businesses and consumers.
"Those principles include ensuring that executive compensation is limited so that the American taxpayer can feel confident that any money that's used as a part of a financial stability package doesn't go to line the pockets of a CEO," White House spokesman Robert Gibbs said.
Timothy Geithner, whose nomination to be treasury secretary cleared the Senate Finance Committee on Thursday, told the committee in written response to questions that "oversight and transparency requirements in the original proposal were inadequate." He said banks would have to provide "detailed and timely information on their lending patterns broken down by category."
In addition, a new special inspector general assigned to oversee the funds said Thursday that he will ask all institutions that have already received money from the Troubled Asset Relief Program to account for their use of the money and to detail any steps they have taken to meet existing executive pay caps.
"If the American taxpayer is to be expected to fund this extraordinary effort to stabilize the financial system, it is not unreasonable that the public and its representatives in Congress have some understanding as to how those funds have been used by the recipients," the inspector general, Neil Barofsky, wrote to Sen. Charles Grassley.
Thursday's vote illustrated how the House, where members face election every two years, is much more sensitive to public opinion than the Senate, with its six-year terms of office.
Ninety-nine Democrats joined 171 Republicans in voting to reject the money in a vote that put conservatives and liberals on the same prevailing side. Republicans had grudgingly voted for the $700 billion Troubled Asset Relief Program last fall and were still smarting over Bush administration decisions to use some of the money to help the auto industry and to give money to banks with few conditions. Democrats, freed by the Senate from the pressure to support Obama, fled from the program as well.
"My goodness, I can't stand here as a member of Congress and vote to release the second half of this money without knowing what happened to the first half of it," said House Minority Leader John Boehner, R-Ohio.
Democratic opponents of the fund described the bailout as a misplaced priority.
"There's a massive transfer of wealth going on, taking money out of the pockets of the American people and putting it into these banks," said Rep. Dennis Kucinich, D-Ohio. "This has to stop. We have to stop."
The vote came a day after the House voted 260-166 to set greater reporting requirements on banks that receive bailout funds. House Financial Services Chairman Barney Frank, D-Mass., who supported releasing the funds, conceded Thursday's vote was moot.
"Why are we still voting on it?" he asked. "Because there is a degree of anger in the American public at what they think is a very unfair system that gives benefits unduly and disproportionately to some of those who caused the problem, while denying health care and unemployment compensation and a decent higher education for working-class people."....