President-elect Barack Obama told Democratic senators in a closed lunch today that he needs the second $350 billion authorized by Congress as part of the TARP legislation last year and that he'll veto any move by Congress to cut that funding off.
And Obama was not the only member of the incoming administration trying to sell his plan to Democrats today on Capitol Hill.
Larry Summers, the incoming leader of Obama's National Economic Council, met this morning with Democrats on the Senate Finance Committee to get more of their input on the $700 billion plus the stimulus package, a separate bill to inject capitol in the economy. It was Summers' third meeting with Democratic senators in five days on the stimulus proposal, which includes tax measures and infrastructure spending that Obama wants to pass early this year.
Some skeptics of the stimulus recipe were in today's meeting and sounded more optimistic about what will actually be in the package when details are officially announced.
The two bills represent the main prongs of Obama's short-term economic plan, but they will require some salesmanship for both Republicans and Democrats frustrated after signing a $350 billion check for the unpopular TARP funds and jockeying for what should be included in the stimulus bill.
The more immediate concern is the TARP (Troubled Assets Relief Program) money. President Bush formally requested the second $350 billion authorized by that law Monday for use after Obama is inaugurated.
Congress has 15 days to vote on a measure that could deny Obama the TARP funds, but that resolution is subject to a presidential veto.
In order to keep the money from the president, both houses would have to override a veto. It is unclear whether that veto would come from Bush or Obama after next Tuesday. In either case, Senate Majority Leader Harry Reid, D-Nev., said today he is "very confident" there are the votes to defeat the resolution and release the $350 billion in TARP funds.
Reid said after the meeting with Obama he believed there would ultimately be enough senators to defeat any effort to block the second infusion of TARP money.
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.
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.