RENEE MONTAGNE, Host:
Joining us now is Congressman Barney Frank. Good morning.
C: Good morning.
MONTAGNE: What would be more appropriate? You say the rest of the bailout money should be used in more appropriate ways. Give us some specific examples.
C: And inexplicably to me, the Bush administration ignored the very specific language in their first efforts to deal with foreclosure. Secondly, and we've mandated in this bill - I put a bill on the floor because I think members need a chance to vote to show what they really want in this. And we we asked that up to 100 billion of the 350 go to foreclosures, and if they don't do that, they've got to explain why they couldn't.
MONTAGNE: Well, let's talk, Congressman, just momentarily about foreclosures. Given that a significant percentage of loans modified in 2008 went back into foreclosure, how can you assure that mortgages will be modified in such a way that the borrower doesn't go back into default and keep this mess going?
C: For example, one of the major ones that we adopted - and it had some flaws in it, and we need the TARP money to fix it up - would be to reduce the amount of principal people owe. If you reduce the principal, you're much less likely to get these re-defaults. Even there, by the way, there's been a high number of re-defaults, but they've been cut - the foreclosures have been cut in half in those programs. We could do a lot better than that. So that's precisely the point. Without this kind of money and without this sort of effort, it won't be as successful.
MONTAGNE: As we just heard from our reporter, President-elect Obama wants to spend the second 350 billion in different ways - this time, putting the focus with some of that money on housing and on small business. How will this work better than the way the first half was spent?
C: Well, that's what we were just talking about. I'm sorry, my...
MONTAGNE: Small business.
C: The different approach that you're going to see under President Obama is, yes, we're going to give this money to financial institutions - in part. Some of it will go in foreclosure and elsewhere, but we are not simply going to give it to them and sit back and assume they'll do the best. We are going to prescribe more rules as to how they spend it.
MONTAGNE: We're talking with Congressman Barney Frank, the chairman of the House Financial Services Committee. We just have a few seconds left, but let me just ask you, many lawmakers from both parties are unhappy with the way the first installment of the bailout money was spent.
C: Everybody is.
MONTAGNE: Right. Is it going to - is Congress going to release that next 350 billion?
C: In other words, this is part of a very big change. And yes, it is true that almost everybody is dissatisfied with the way in which the Bush administration administered the first half. But it is precisely because of that dissatisfaction, I believe, that we've elected President Obama. And to deny him tools that he could use constructively because you're unhappy with the way the Bush people used them would really be to kind of say, well, what was the point of having the election?
MONTAGNE: Thank you very much for joining us. Congressman Barney Frank is chairman of the House Financial Services Committee.
NPR transcripts are created on a rush deadline by Verb8tm, Inc., an NPR contractor, and produced using a proprietary transcription process developed with NPR. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.