Dodd: Congress Would Vote Against Release Of 2nd TARP Tranche
December 12 2008 - 3:27PM
Dow Jones News
Congress would vote against releasing the second tranche of $350
billion of funds under the financial rescue package if Treasury
Secretary Henry Paulson requested them, a leading Democratic
senator said Friday.
Sen. Christopher Dodd, D-Conn., the chairman of the Senate
Banking Committee, and the Democrats' chief negotiator on the
financial rescue package, said that decision would be due to anger
over the handling of the first tranche of funds by the
Treasury.
The Troubled Asset Relief Program created by the White House and
Congress allocated $700 billion to the Treasury to use to stabilize
the financial markets.
The goal of the program was that the federal government would
strengthen bank and other financial institutions balance sheets and
they would in turn start lending more to each other, businesses and
individuals to unglue seized-up credit markets.
But under with nearly half the money spent, many lawmakers have
complained that there is little evidence that many of the banks
that have received taxpayer financial assistance have used the
money to increase lending levels.
The legislation creating the TARP stated that lawmakers could
prevent the second tranche of money being released by passing a
resolution of disapproval.
Last week, Dodd said that he would personally oppose the release
of the funds to the Treasury. Friday, he went further, saying he
now believed that Congress would vote against the release.
Paulson has so far not formally requested the release of the
funds.
Even if Congress approved a resolution of disapproval, President
George W. Bush would be able to veto it, so lawmakers would
realistically have to vote for the resolution by a two-thirds
veto-proof majority.
-By Corey Boles, Dow Jones Newswires; 202-862-6601;
corey.boles@dowjones.com
Click here to go to Dow Jones NewsPlus, a web front
page of today's most important business and market news, analysis
and commentary:
http://www.djnewsplus.com/al?rnd=H3p6tBa69Yk8W%2B7WLYSeeQ%3D%3D.
You can use this link on the day this article is published and the
following day. .