Paulson Giveth and Paulson Taketh Away
Remember about a week ago when Treasury Secretary Henry Paulson said he would let the incoming Obama administration decide how to spend the remaining half of the $700 billion Wall Street bailout package approved by Congress last month?
It looks like he may want to spend that money himself, after all. From Bloomberg:
Paulson may ask Congress for the remaining $350 billion from the Troubled Asset Relief Program as he puts together plans to boost consumer credit. Treasury and Federal Reserve officials are working on an effort to buttress the market for securities backed by auto, student and credit-card loans, Paulson said last week. He’s also assembling an office to address mortgage foreclosures.
Six days ago, Paulson told Congress “it was only prudent to reserve our TARP capacity, maintaining not only our flexibility, but that of the next administration.” Since then, the collapse in Citigroup Inc. shares threatened a renewed bout of financial turmoil, and forced the Treasury to mount a rescue of the bank late yesterday.
It’s hard to imagine the Obama team objecting — allowing Paulson to spend the whole package as he sees fit gives the Bush administration full ownership of the handling of the bailout and would effectively let Obama wash his hands of the whole ugly mess.
While Obama voted for the bailout, as did 73 of his Senate colleagues, the finished product has been through so many twists and turns, essentially at Paulson’s whim with virtually no oversight, that few in Congress could say the money was spent as intended.