Senate May Vote by Week’s End on Remaining Bailout Funds

Posted January 11, 2009 at 5:03pm

The Senate could vote by the end of the week on whether to give the incoming Obama administration access to the remaining $350 billion in financial bailout funds.

Senators leaving a special Senate Democratic Caucus meeting on Sunday said they expect the Bush administration to request the funds within a matter of days, if not by Monday. Lawmakers said they also expect President-elect Barack Obama’s Treasury Secretary nominee, Timothy Geithner, to write a detailed letter outlining how the new administration will oversee the funds.

Democrats said Geithner’s letter is crucial to the release of the funds, given what many consider to be a mismanagement of the first installment of $350 billion. Many lawmakers on both sides of the aisle would like to pass legislation to make changes in the way the Treasury Department oversees the money, but conceded they don’t have time to move a bill through both the House and Senate.

Senate Banking, Housing and Urban Affairs Chairman Chris Dodd (D-Conn.) said he expected Geithner’s letter to outline plans for restrictions on the financial institutions’ funding, and added it could potentially include requiring them to engage in mortgage foreclosure mitigation, bar acquisitions with federal money, and put new restrictions on executive compensation.

Dodd said he hopes that will be enough to convince skeptical Members to vote to release the funds.

The remaining financial bailout money was discussed at a special caucus that followed a rare Senate vote on Sunday. Originally, the meeting was designed to continue discussions with Obama’s economic advisers over what could be an $800 billion economic stimulus plan that Congress hopes to pass by mid-February. Democratic Senators first met with the advisers on Thursday and emerged with many proposed changes to the plan.

Sen. John Kerry (D-Mass.) said Obama has made “significant changes” since the first session, and has been incorporating new ideas on taxes and spending. Already Obama has decided to increase funding for energy investments and is making changes to a controversial provision to provide businesses tax credits for job creation.