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.