In what’s being officially hailed as Obama’s first big legislative win, the Senate defeated an anti-Ogenda bill last week that would have blocked the release of $350 billion more in Wallstreet bailout, or TARP (Troubled Asset Relief Program), funds.
The TARP vote was tight, Obama worked the phones and sent incoming chief of staff Rahm Emanuel to hustle Republican votes. It worked; six Republicans voted with the Democratic majority to release the money for a 52-42 win.
O couldn’t convince all the Democrats to hand over the money. Washington’s junior senator, Maria Cantwell, who voted against the initial TARP bill in October, voted to block the money again. She was one of nine Democratic senators to do so.
Cantwell has not issued a statement on her latest vote (and her office didn’t return my calls or emails). Here’s what she said when she voted against TARP last October:
While I remain supportive of leveraging the full faith and credit of the U.S. Government to try and avoid further financial meltdown, it's important that the Treasury Department's decision-making be based on a clear set of policies and principles.
The Treasury Department is reportedly now considering injecting capital directly into the financial system in return for ownership stake in participating banks. I am pleased to see that the Treasury Department may now be moving in the direction I advocated because the equity stake model is better for American taxpayers than the troubled asset purchasing program that was the focus of Secretary Paulson's plan. The equity stake model does more to protect taxpayers and leverage additional private capital, which are essential to getting credit flowing again, and is less risky than buying up toxic financial assets.
Since the $700 billion financial rescue bill focused around the Troubled Assets Relief Program (TARP), the Treasury Secretary must, at a minimum, report back to Congress on the design and structure of any proposed equity stake program. We must continue to guarantee that there is transparency and full accountability in the way that the Treasury Department is carrying out its authority to address the financial crisis. I call on Secretary Paulson to outline for Congress, the American people, and the world's financial markets the steps they are pursuing to restore capital liquidity, protect U.S. home values, and safeguard taxpayers' hard-earned dollars.
Were her concerns addressed? Not legislatively.
Obama has offered to address some of those criticisms. In a personal pitch to Democratic senators this week and in two letters sent to lawmakers by his top economic adviser, Lawrence H. Summers, Obama has pledged to focus the rest of the TARP funds on homeowners and credit markets, and to bolster oversight of companies participating in the program.
In the latest letter, transmitted hours before yesterday's vote, Summers pledged to advise Congress before making any "substantial new commitment of funds," to quickly disclose the details of any purchase of stock or assets and to force financial firms that accept the money to limit executive salaries and prove they are using it to increase lending.
Summers also vowed to dedicate $50 billion to $100 billion to a "sweeping effort" to reduce foreclosures. And he assured lawmakers that Obama "has no intention of using any funds to implement an industrial policy," a reference to the concerns of many Republicans that the money would be used to prop up the failing auto industry, which has been awarded a small share of the funds.