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Obama Seeks Bush Help On TARP

MELISSA BLOCK, host:

If it were pro wrestling, they might be called a tag team. As we heard from Don Gonyea, today Barack Obama asked President Bush to formally request the second installment of the TARP funds. Well, this evening that request was sent to Congress by the Bush White House specifying that the additional money will be used in part to help homeowners facing mortgage foreclosure and to expand existing programs. As far as actually getting that additional money, NPR's John Ydstie reports that wrestling the $350 billion from Congress could be difficult.

JOHN YDSTIE: Today, in his news conference, President Bush defended his administration's use of the first $350 billion of TARP funds. He said the actions taken during his watch helped to thaw the frozen credit markets. But lawmakers from both parties are unhappy. Many complained that banks who got hundreds of billions from the program aren't lending, that home owners facing foreclosure have gotten nothing, and that the automakers who got a bailout aren't deserving. Today, President-elect Obama said he would use the TARP differently.

(Soundbite of news conference)

President-elect BARACK OBAMA: We're going to focus on housing and foreclosures. We're going to focus on small businesses. We're going to focus on what's required to make sure that credit is flowing to consumers and businesses.

YDSTIE: Mr. Obama, who made the remarks during a photo opt with the president of Mexico, went on to say that he had asked Mr. Bush to request the money now because the financial system is still fragile.

(Soundbite of news conference)

President-elect OBAMA: And I felt that it would irresponsible for me with the first $350 billion already spent, to enter in to the administration without any potential ammunition should there be some sort of emergency or weakening of the financial systems.

YDSTIE: Mr. Obama didn't say it but another reason he wants President Bush to ask for the money is a hope that Mr. Bush will take the political heat. In fact, a resolution to block the second $350 billion has already been filed in the house by Virginia Fox, a Republican from North Carolina. If TARP opponents get a majority and pass the resolution, the president could veto it.

Democrats hope the vote happens quickly so President Bush wields the veto pen and spares Mr. Obama the prospect of having to override Congress be one of his first to act as president. Given the broad grumblings in Congress over TARP spending and warnings of trillion-dollar deficits, a veto override is not of the question, say House Minority leader John Boehner.

Representative JOHN BOEHNER (Republican, Ohio): The president is going to have to hold a third of the Senate or a third of the House, and have them in favor of this. If the money is going to be released - I mean, at this point, I think that's going to be a pretty tough sell.

YDSTIE: Boehner was speaking yesterday on CBS' Face the Nation. Today, Larry Summers, who will head Mr. Obama's National Economic Council, sent a letter to the leaders of the House and Senate detailing Mr. Obama's plan for using the second $350 billion of TARP funds. Those plans include help for struggling home owners, small businesses and municipalities, and more limits on executive compensation. John Ydstie, NPR News Washington. Transcript provided by NPR, Copyright NPR.

NPR transcripts are created on a rush deadline by an NPR contractor. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.

John Ydstie
John Ydstie has covered the economy, Wall Street, and the Federal Reserve at NPR for nearly three decades. Over the years, NPR has also employed Ydstie's reporting skills to cover major stories like the aftermath of Sept. 11, Hurricane Katrina, the Jack Abramoff lobbying scandal, and the implementation of the Affordable Care Act. He was a lead reporter in NPR's coverage of the global financial crisis and the Great Recession, as well as the network's coverage of President Trump's economic policies. Ydstie has also been a guest host on the NPR news programs Morning Edition, All Things Considered, and Weekend Edition. Ydstie stepped back from full-time reporting in late 2018, but plans to continue to contribute to NPR through part-time assignments and work on special projects.