Obama Lobbies for TARP Funds, Stimulus Plan

Democratic Doubts Over TARP

Democrats and Republicans have some of the same grumbles about the TARP money. They want more specifics from the incoming administration on how the money will be used.

Larry Summers, middle, the incoming leader of President-elect Barack Obama's National Economic...

Larry Summers, middle, the incoming leader of President-elect Barack Obama's National Economic Council, met this morning with Democrats on the Senate Finance Committee in his third appearance on Capitol Hill in less than a week on the stimulus proposal. Sen. Blanche Lincoln, D-Ark., left, and Sen. Ron Wyden, D-Ore., right, are two Democrats in the Senate who have expressed concern about TARP legislation and want more assurances from the incoming administration that the money will be monitored.

(Getty Images/AP Photo)

Republicans, however, want to keep the money focused on the financial industry.

"We'd like to hear more from the new president and his team about just exactly how the $350 billion would be used," said Senate Minority Leader Mitch McConnell, R-Ky., who pointed out that the money was used to support banks and the auto industry, but never to buy the troubled assets it was originally meant to buy.

"We had a sense, based on the representations that were made at the time, that it was about saving the financial system," McConnell said. "The outgoing administration then ended up using it for an automobile bailout. And I think I'm safe in saying that that diminished significantly the enthusiasm among Republicans for the second tranche of the TARP."

At the Senate Budget Committee's confirmation hearing of Peter Orszag today, Sen. Bill Nelson, D-Fla., questioned Orszag about the second installment of TARP funds and the economic recovery plan, complaining that he hadn't been given details about either.

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When Orszag deferred to Summers or Treasury secretary nominee Timothy Geithner for answers about those programs, Nelson said that wasn't good enough.

"It is my understanding that by Thursday, or maybe Friday, we're going to vote on whether or not to expend an additional $350 billion of TARP money," he said. "I think in this era of freshness and transparency that the new administration would want to come forth with detail(s) instead [of] this mumbo jumbo that's going on."

Three Democrats emerging from the meeting with Summers said they'd need more assurances from the incoming Obama administration about how that money would be spent, how it would be tracked and what conditions would be imposed on the institutions that take it.

"We need to have a better understanding and a better idea of how those dollars are going to be spent and where they're going to go. We haven't gotten a good idea in the past," said Sen. Blanche Lincoln, D-Ark.

"The letter was fine," she said of the message Summers sent to Congress Monday, laying out how the Obama administration would seek to keep track of the second $350 billion. "But there were no specifics in that letter."

Another concerned voice was that of Senate Finance Committee Chairman Sen. Max Baucus, D-Mont.

"Most senators are very concerned that the first 350 was spent unwisely and that if there is a second 350, it is spent more wisely," Baucus said. "I'm looking at the conditions. If the conditions are quite significant, then I'll support it. But I have to see the conditions."