House Votes to Block Second Half of Bailout

Jan 22, 2009
Economy
In The News

WASHINGTON – In a largely symbolic vote, all five Oklahomans in the U.S. House voted for a resolution Thursday to block the second half of the $700 billion bailout of the nation’s financial system.

Last week, the Senate rejected that effort, ensuring that $350 billion in Troubled Assets Relief Program funds will be released to the new Obama administration. House members voted 270 to 155 for the resolution.

When the massive bailout was approved last year, Oklahoma Republicans John Sullivan, Tom Cole and Mary Fallin and Democratic Rep. Dan Boren voted for it, while Republican Rep. Frank Lucas voted no.

Several who switched sides this time out spoke of the lack of transparency and the unexpected ways the first $350 billion had been used.

“While I supported the initial financial rescue package and still do believe that congressional action was warranted to protect the economic future of every American, I am now concerned that previously approved TARP funds are not being used for their intended purpose of stabilizing our troubled financial sector,’’ Sullivan said.

He said the funds were intended to help protect the pensions, investments and ability of Americans to obtain a line of credit, but their use has been dramatically expanded to include an unprecedented, irresponsible bailout of the Big 3 auto makers.

“It is irresponsible for Congress to even consider releasing billions more dollars when we don’t yet know what impact the initial funds will have on our economy,’’ Sullivan said.

Boren said he voted to block the funds because the additional oversight and taxpayer protections included in a House bill passed on Wednesday have not been fully enacted into law.

“Until those critical components are added to TARP, we should not release the next round of funding,’’ he said.

Fallin also said the program currently lacks sufficient accountability and transparency to protect taxpayers and guarantee its effectiveness.

“Like all Americans, I want a plan in place to stabilize and reinvigorate our economy,’’ she said. “I do not believe, however, that the federal government can borrow and spend its way out of a recession; nor do I believe that writing blank checks is a responsible or effective way to govern.’’

Lucas said specific details have not been provided on exactly how the second half of the bailout money will be spent.

“The American people deserve to know where their money is being spent before the Department of Treasury spends it,’’ he said.

Instead of using the initial half of the money to purchase troubled assets, Lucas noted the Bush administration purchased stock in large financial institutions, located primarily on the east and west coasts.

Rep. Barney Frank, D-Mass., chairman of the House Financial Services Committee, said no matter what happened in the House, the program will move forward because of the previous Senate action.

Frank, a supporter of the program, described as a drafting error the provision in the original legislation allowing a House vote after the Senate action.

Rep. Virginia Foxx, R-Va., who sponsored the resolution of disapproval, said the House vote was important because it allowed lawmakers to go on the record again on the massive bailout.

Foxx said the vote also sends a message to the Obama administration that the bailout mania must stop.

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