GOP Sens Meet With Obama Officials; Still Skeptical Over TARP
15 Januar 2009 - 1:13AM
Dow Jones News
Senior officials for President-elect Barack Obama told Senate
Republicans Wednesday that the second tranche of $350 billion in
Troubled Asset Relief Program funds would only be used to stabilize
the financial markets, not to bail out specific industries like the
auto sector, said several GOP lawmakers.
"I think I'm safe in saying they certainly did not represent
that they are in favor of industrial policy," said Senate Minority
Leader Mitch McConnell, R-Ky., after a meeting with the Obama
officials.
By industrial policy, McConnell said he meant a situation where
the federal government chooses winners and losers in the
economy.
But despite the assurances, after the meeting with Rahm Emanuel,
who will be Obama's chief of staff, and Lawrence Summers, Obama's
choice to head the White House Budget Office, most Senate
Republicans still sounded skeptical they would vote for the release
of the funds to the Treasury.
"I'd have to make a more detailed presentation to borrow $10,000
from my local bank," said Sen. Jim DeMint, R-S.C.
One of the most oft repeated complaints by Republican senators
has been that some of the money in the first tranche of the TARP
was used to rescue car makers General Motors Corp. (GM) and
Chrsyler LLC, after the Senate voted down a separate rescue package
tailored specifically for them.
GOP lawmakers argued that the original purpose of TARP was to
help loosen up the seized credit markets, and increase lending
levels to both individuals and businesses.
Several have said this week that for that very reason, they
would not support the release of the second half of the money.
"The current Administration used some of the TARP funds to
provide assistance to a specific industry, in this case the
automobile industry," said McConnell. "That created a dramatic
reduction of support in my conference."
Sen. Bob Corker, R-Tenn., said there were no guarantees that the
incoming Obama administration would use the money solely in the
financial sector.
"They're not closing the door," Corker said. "I think there may
be a reason for the vagueness."
After the meeting, McConnell and others urged the Obama camp to
make further public pronunciations about how they would use the
funds.
Monday, a letter sent to congressional leaders by Summers
detailing how the TARP program would change under an Obama-led
Treasury was aimed at alleviating lawmakers' concerns, but it
clearly didn't do the job.
There is little support in the House to release the funds, which
means the Senate is where the Obama will have to turn to in order
for the funds to be available for his Treasury.
At least two GOP senators are on record saying they will vote
for the release of the funds: Sens. Judd Gregg, R-N.H. and Olympia
Snowe, R-Me.
With their support, and the bulk of the Senate Democratic caucus
likely to vote for the funds to be made available to the Treasury,
there is probably enough votes to do so.
But what Obama and his senior advisers are hoping is for strong
bi-partisan support from the Senate when it meets to vote possibly
as soon as Thursday.
The controversial program will see another $350 billion spent on
providing relief to the financial markets at a time when many
Americans have lost their own jobs, and there is little
understanding of how the first half of the money was spent.
-By Corey Boles and Patrick Yoest, Dow Jones Newswires;
202-862-6601; corey.boles@dowjones.com
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