In closed door meetings yesterday, Barack Obama's aides told lawmakers that the new president would spend the remaining $350 billion of the financial bailout (TARP) on the housing crisis by reducing home foreclosures and increasing lending. The Senate is set to vote today on whether to give Obama the funds.
But not everyone is enthusiastic about Obama's creative plans for spending the money. The GOP leader in the Senate, Mitch McConnell, doesn't want the government to decide the winners and losers in the economy. He said: "We thought the $700 billion, not just $350 billion of it, but all of it, was designed to save the credit system." McConnell, and presumably a good number of Republican lawmakers, would like to see the distribution of funds limited to financial firms.
Still, nothing with this bailout has quite gone according to plan. Bush's Treasury Secretary Paulson told lawmakers originally that he would spend the money to buy toxic assets — instead banks got money with few strings attached. Would you rather see the money go to financial institutions only, or would you want Obama to focus on reducing home foreclosures?