Go Back Jack, Do it Again…Another 350B…PEBO asks for TARP Tranche Two

(courtesy of Melegorm)

Finally the frakin letter itself!

To be ABSOLUTELY CLEAR HERE, LOL, this is Team PEBO, which is largely comprised of UofC (Fuhrman, Goolsbee both in the meeting with DEM Senate leadership yesterday-the bill in question is coming from the House) and moderate Capitalists (Summers et al) , certainly not economic lefties, snark..

anywho, this is an attempt to head off the legislation Barney Frank has a hearing scheduled on tomorrow. The LETTER is a loose framework of nice words and means nada, I hope Barney passes this legislation before he hands over ANOTHER 350B of the taxpayer dollars with nary a string and a handshake and a letter. He should have learned from the first tranche.

Different players, same story. They are not really that different are they? It is Geithner incoming Treasury Secretary who ran the AIG and CITI bailouts after all….

PASS THAT LEGISLATION BARNEY! Don’t give them the dough without protecting taxpayers this time!!

Update 5: The letter via WGNtv :

President-elect Barack Obama’s top economic adviser tells Congress that the need for the remaining $350 billion of the financial bailout package is “imminent and urgent.”

Larry Summers has written a letter to the bipartisan leadership of the House of Representatives and the Senate to assure lawmakers that the money will be used to help community banks, small businesses, consumers and homeowners as well as large financial institutions.

And more interesting background from KTTC Rochester (via Politico):

Emerging from a two-hour meeting in the Capitol with Obama advisers Lawrence Summers and Jason Furman, Senate Democrats praised the President-elect’s team for agreeing to make changes to its stimulus proposal based off of concerns senators raised last week at a meeting with the president-elect’s senior aides.

The Obama team told about 35 Senate Democrats gathered at Sunday’s meeting that it would grow the size of an energy-tax incentive package and modify proposed tax credits for individuals and for businesses that hire new employees, according to meeting attendees. Also, with lawmakers raising concerns that the first half of the $700 billion of the financial rescue law was badly mismanaged, Obama’s team signaled it would lay out precisely how it would spend the second half of that package, which Congress is expected to consider as soon as this week.

“It’s very clear they’ve listened, they’ve heard and that they’re moving to respond,” said Sen. Kent Conrad, chairman of the Budget Committee, who questioned previously whether the tax credits in the stimulus package were enough to encourage new jobs. “It was very, very healthy. They’re not defensive, not arguing back, they’re listening, they’re attempting to hear and they’re responding.”

Update 4: 12:48pm EST: Update on the ‘letter of understanding’ via FoxBusiness:

The letter includes provisions that would loosely commit the Obama administration to use TARP funds to help troubled homeowners avoid foreclosure; to adopt tougher executive compensation limits and corporate governance standards for firms that participate in TARP, and increase reporting, oversight and disclosure requirements in the program.

The letter would allow the president-elect and Congressional Democrats to avoid a potentially embarrassing veto fight in Mr. Obama’s first weeks in office. The Treasury has spent or committed all of the $350 billion funding in the first half of the $700 billion TARP. To get authorization for the last $350 billion, the president — Bush now, or Obama after he takes office — must submit a report to Congress outlining how the Treasury would spend the money. The funding will be authorized automatically unless Congress votes to approve a “resolution of disapproval” within 15 days of receiving the report.

But the president could veto the resolution. Then to stop the funding, Congress — controlled by the president-elect’s own party — would have to override the veto with a two-thirds vote in the House and Senate.

While sources believe the next $350 billion will come regardless of how the process unfolds, a veto and effort to override it “would set up quite a mess the first weeks in office” for Mr. Obama, a financial industry source said. “That would be a disaster politically.”

Update 3: Larry Summers sending a ‘letter’ FOX reporting -vaguely – that letter indicates they (PEBO Team?) want to get more funds to Main St…

For a GREAT piece on how liberals are viewing the recent PEBO Team activity, read Jimmy Pethokoukis’ column here:

…But it’s Obama’s $800 billion American Recovery and Reinvestment Plan that will be ground zero in this coming liberal internecine battle. “Way too much Reagan, not nearly enough FDR,” griped some key liberals about a plan that would, in addition to the tax cuts, still provide a whopping half-trillion dollars over two years in government spending for infrastructure, healthcare, education, clean energy, grants to states, and aid to lower-income and unemployed folks.

Some of their greatest hysterical hits: 1) “The economic plan he’s offering isn’t as strong as his language about the economic threat,” wrote NY Times columnist Paul Krugman. “In fact, it falls well short of what’s needed”; 2) the Center for American Progress, a liberal think tank founded by Obama transition co-chair John Podesta, said the Obama plan was chock-full of “special interest favorites” and “long-discredited conservative proposals”; 3) Sen. Tom Harkin said Obamanomics “still looks a little more to me like trickle-down,” invoking a Reagan-era economic invective that liberals love to hurl; and 4) Nancy Pelosi, who seems to actually believe the Obama campaign spin that the Bush tax cuts somehow caused the recession, blurted out this gem: “Put me down as clearly as you possibly can as one who wants to have those tax cuts for the wealthiest in America repealed.” Duly noted, Madam Speaker.

Now all this angst and agita are can’t-miss signs of a little understood liberal malady, Clinton Derangement Syndrome: the crippling fear that the progressive president you just elected to launch a pricey new New Deal and nationalize healthcare will, once in office, morph into a budget-balancing, tax-cutting, free trade-loving disappointment. And Obama did little to quell those fears during his appearance on This Week with George Stephanopolous. Asked how he was going to pay for healthcare, Obama gave a reply straight from 1993: “Well, you know, these are going to be major challenges. And we’re going to have to make some tough choices.”…

Update 2: Via CNBC:

President-elect Barack Obama has asked President Bush to seek the remaining $350 billion of the $700 billion financial industry bailout, and Bush agreed to do so, the White House said Monday.Obama’s fellow Democrats, who control both houses in Congress, have expressed reservations about releasing the remaining money unless stricter limits and protections are placed on how the aid is used.

To get access to the remaining $350 billion, the president must tell lawmakers he intends to tap the funds and Congress would have 15 days to consider the disbursement.

White House spokeswoman Dana Perino said Obama made the request to Bush Monday morning.

paulsonobama

BREAKING UPDATE:Monday 11:27am EST:  Only minutes after Dubyah’s final presser in which he said PEBO had not asked him to request TARP Tranche Two, PEBO has done just that.

President Bush has now requested TARP Tranche Two be funded.

Congress has only 15 days to DENY the request or it will go through automatically the way the original legislation is worded…..

Let’s see how fast Frank can pass his TARP legislation…I am worried… I want those strings placed on the money dammit! and I want them to use it for HOUSING….

From Sunday’s Post:

The other big news is the ROY that PEBO and his econ ‘A’ Team are actively working with Dubyah to get TARP Two funded. Now this could get ugly. TARP is funded unless Congress STOPS its funding by a special vote, meanwhile Barney Frank is actively rolling out legislation modifying TARP, adding strings retroactively and two Tranche Two, and capping pay which the original legislation only did with asset purchases…and then of course Paulson didn’t purchase assets so they kept their big salaries and bonuses…

This includes retroactive pay limits, jet bans, and clawbacks from Banks of funds already delivered via TARP Tranche One. This is creating panick among the financials and it sounds to us as though they ran like their heads were on fire to PEBO via their mutual staff -Tim Geithner, and Kashkari was instantly tapped to stay on…

If PEBO helps Dubyah access TARP Tranche Deux before Barney gets his legislation passed (the part of which I am most concerned with is the housing aspect which Barney’s plan FINALLY gets done)..well again, what an ugly showdown and what a way to start off by burning the DEM leadership…

Let’s see what happens,a nd once again CORN futures will rise as popcorn sales take off…

Politico:

Bush and Obama are coordinating their actions in order to get the second TARP traunch through a recalcitrant Congress, which feels (rightfully) burned by the hoarding, lack of oversight and exec junkets that marred the first $350 billion bank bailout.

-snip-

“The House will pass Chairman Frank’s legislation to increase accountability and oversight next week regardless whether the request is made for the additional funds,” said Pelosi spokesman Nadeam Elshami. “The leadership remains in close contact with the Bush Administration and the transition team, but no final decisions have been made.”

-snip-

Nonetheless, Congress is fixing for a fight over TARP and could pass legislation that is unacceptable to either White House.

Okay so to be clear, this is PEBO potentially, rumored to be,  siding against the DEM Congressional Leadership which is about to enact TARP legislation that will FINALLY help housing and get some strings on the first 350 billion to ensure it is used for consumer lending in part…

charlie-brown-and-lucy-van-pelt-189

Instead WaPo reports,  and Politico picks up, that PEBO is ready to help Paulson via Kashkari get TARP Two funded without that Congressional Legislation?!…Remember PEBO and Paulson spoke about housing in July, and Team PEBO leaked to press that Kashkari is staying on to handle TARP….oh woe to PEBO if he does it, then the scales will really be lifted …fer shure…..you know?….you betcha!!!

January 11, 2009. Tags: , , , , , , , , , , , , , , , , , , , , , , . Economy, Finance, Foreclosures, Housing, Obama Administration, Politics, TARP, Wall St.

One Comment

  1. Geithner in the Hot Seat… « Moderate in the Middle replied:

    […] Stimulus or as we at MiM call it – “fix housing!- Duh!” here and here and  here and here and here and here and here and here and here and here and even […]

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