WASHINGTON–Initially billed as potential salvation for a troubled secondary mortgage market, the Bush administration is no longer expected to go back to Congress to request the remaining $350 billion authorized for the Troubled Asset Relief Program.
Though Treasury Secretary Henry Paulson was vague on Friday, most observers said limited time, political backlash, and a stash of still-unspent money would probably persuade the administration to sit tight for the month remaining in President Bush’s term.
“I don’t see there is a will in Congress to get this done,” said an industry lobbyist. “It’s a timing issue as well as a more political issue, where people are getting a lot pressure for approving the TARP and there doesn’t seem to be the benefits that were promised and you also have a new administration coming into office in less than a month.”
Paulson and President Bush announced Friday that the administration would allocate $13.4 billion from TARP for General Motors Corp. and Chrysler and another $4 billion in February when the second half of the TARP funds is available. This would leave $1.6 billion unallocated from the first TARP tranche and $82.2 billion not yet spent. Paulson left the door open when discussing further funding.
Sen. John Sununu (R-NH), recently appointed to the five-person congressional oversight panel for TARP, said he expects the Treasury to leave this decision to the Obama administration.
Paulson has “indicated that the additional funds will be required and that’s he’s going to work with the incoming administration and designated Treasury officials to put together a proposal for requesting access to those funds, but the funds themselves, I think it’s clear, would be allocated, disbursed by the incoming administration,” Sen. Sununu said Friday.
Under the Oct. 3 law authorizing TARP, the Treasury must report to Congress its intention to use the second $350 billion of funding. If Congress does not disapprove within 15 days, the Treasury would be able to use the money.
