Congress To Attach Strings To Bailout Money
STEVE INSKEEP, host:
It's Morning Edition from NPR News. Good morning, I'm Steve Inskeep.
RENEE MONTAGNE, host:
And I'm Renee Montagne. President-elect Barack Obama is asking Congress to do something it normally doesn't - act swiftly. He wants lawmakers to approve a lot of spending, and we'll hear the thoughts of House Speaker Nancy Pelosi in a moment.
INSKEEP: We begin with just one of the massive requests from the president-elect. He wants access to the rest of the money that was committed to bail out the financial industry. About half that $700 billion is still available. Lawmakers are now deciding under what conditions they would give it to him. Here's NPR's Scott Horsley.
SCOTT HORSLEY: Congressman Barney Frank thinks lawmakers should allow the incoming administration to use the second half of the bailout money. But the Massachusetts Democrat who chairs the powerful House Financial Services Committee is not willing to simply hand over a blank check.
Representative BARNEY FRANK (Democrat, Massachusetts; Chairman, House Financial Services Committee): Many of us believe that before voting yes or no, we ought to be able to say, "yes but..." I take it back. Not "yes but...," but "yes if..."
HORSLEY: "If" in this case means if the next $350 billion is spent very differently than the first 350. Frank wants a full accounting from financial firms that get the so-called TARP money. He wants more of it to go to smaller banks. And he wants a sizeable chunk devoted to helping homeowners who were otherwise at risk of foreclosure.
Representative FRANK: It reminds people that Harry Truman said being president of the United States means trying to get people to do what they should have done in the first place on their own if they had any brains. And that's what we are trying to do with the TARP. We're trying to get an administration to do what it should have done in the first place.
HORSLEY: Mr. Obama has promised a sweeping effort to help struggling homeowners, but Frank wants to see a price tag on the plan. He's offered legislation that would require at least $40 billion of the bailout money to go for foreclosure prevention. Mike Calhoun of the Center for Responsible Lending says at least a hundred billion is what's really needed.
Mr. MIKE CALHOUN (President, Center for Responsible Lending): Time is running out to stem the flood of foreclosures and protect Americans from an even deeper financial meltdown. Eight to ten million American households will lose their homes to foreclosures - one out of six families over the next four years.
HORSLEY: The president-elect has also promised that more of the bailout money will be used to help small businesses and consumers who need credit. North Carolina Republican Walter Jones complains financial firms that got the first half of the money in many cases just held onto it.
Representative WALTER JONES (Republican, North Carolina): I do not know how these banks are getting by with fattening their profits, so to speak, because they were in trouble and we give them money - the taxpayers do. And yet the taxpayer who has a business, small or large, can't even get a loan.
HORSLEY: Some lawmakers are skeptical that another $350 billion is needed right away. Republican Spencer Bachus of Alabama says the financial system seems more stable than it did last fall. He wonders what's the hurry to spend more taxpayer money.
Representative SPENCER BACHUS (Republican, Alabama): We understand Americans are struggling, that people are out of work. But that's no excuse to rush to judgment and really take $350 billion from the very people that we're concerned about.
HORSLEY: But President-elect Obama said this week the financial system is still fragile, and he wants some ammunition to fend off any additional financial attacks. Mr. Obama made his case in person yesterday in a meeting with Senate Democrats. Afterwards, Senate Majority Leader Harry Reid said he's very confident he'll have the votes needed to keep the bailout money flowing.
Senator HARRY REID (Democrat, Nevada; Senate Majority Leader): I think it was a very good meeting. We left, I think, all of us felt very good that we're going to work with the president-elect to bring the country out of a deep hole that it finds itself in.
HORSLEY: A vote on the money could come as early as tomorrow. Scott Horsley, NPR News, Washington.