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Can Obama be Trusted with the Financial Bailout Money?

January 12, 2009 - by Donny Shaw

This morning, I wrote about a bill from Rep. Barney Frank (D-MA) designed to improve accountability of the remaining $350 billion of the financial bailout program known as TARP. Frank’s bill would require bailed out firms to report how they have spent the taxpayer money,strengthen restrictions on executive pay, require the Treasury to use some of the money for foreclosure prevention, and much more.

But now Barney Frank seems to be backing away from passing his bill and, instead, is trusting that President-elect Obama will follow it even though it isn’t required by law:

>Frank introduced legislation at the end of last week that would have tied a number of strings to the second $350 billion in financial-industry bailout funds. But on Monday, he told fellow Democrats that he wouldn’t push for passage of his bill if President-elect Obama would give “his word” that he would implement major portions of his legislation, according to a House Democratic aide.
>
>The agreement would give Obama freedom to spend the TARP funds – confined by whatever promises he makes to Congress – and side-steps what could be a difficult fight in both the Senate and the House.

I’m interested to hear what people think about this. I mean, that’s a lot of trust to instill in an administration that hasn’t even come into power yet. Apparently this is Frank’s reasoning:

>Reaching an agreement with Obama, rather than forcing his hand with legislation, could circumvent a balance-of-powers conundrum Frank laid out on Friday. “The problem that we have is that in the legislative branch, it’s easier to prevent people from doing bad things than make them do good things,” he said. By coming to terms, he could get assurance that Obama would do those good things — but at the same time would be giving up a measure of congressional authority.

This morning, at Barack Obama’s request, President Bush formally notified Congress of his intent to use the last $350 billion of the financial bailout money.

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Comments

  • Maurice 01/12/2009 5:51pm

    The Obama speech is sparking many talks about the new stimulus package and the payday loan reform going on in New Hampshire. Barack Obama gave his economic address today, and a few Republicans had something to say about the plan. Fortunately, everyone agrees that a stimulus package is what the American people need, and they need it fast. Too many people need a payday loan nowadays just to get by. Not surprisingly, though, House Minority Leader John Boehner and Senate Minority Leader Mitch McConnell agreed that the plan was too costly. Boehner declares that “we can’t buy prosperity with more spending,’’ and McConnell suggested that money given to states should be loans instead of grants. To read more about the new stimulus plan and what some thoughts are on the American Recovery and Reinvestment Plan, read this article at your ”http://personalmoneystore.com/moneyblog/2009/01/08/republicans-respond-to-obamas-economic-address-article-by-your-payday-loan-source/">payday loan source.

  • Anonymous 01/13/2009 9:18am

    The ONE HOBO pained him for the cash with no accounting.

  • Anonymous 01/14/2009 11:48am

    I can’t wait to jettison Bush & Chenney. We should take their pension and benefits package to help fund and extend unemployment for all the people they robbed and put in poverty!

  • jerrymac 01/17/2009 8:51am

    The jury is still out on this one. However, I think it would have been a good opportunity for pres-elect Obama to solidify his trust with the American people by adopting some form of bail-out accountability. After all, he did campaign on government transparancy. I’ll be watching and following this one closely.

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