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Treasury Tapping Second TARP Installment ‘Before It Has Been Released By Congress’

January 8, 2009

According to multiple reports, the Treasury Department has allocated nearly $10 billion more in funds from the Troubled Assets Relief Program (TARP) than Congress has officially released, “effectively making more promises than it can afford to keep.”

Under the TARP legislation, Treasury is allowed to hand out $350 billion of the $700 billion program, and must make a formal request in order to use the rest of the money. However, with the $6 billion allocated to auto-finance company GMAC on Monday, Treasury has appropriated $358.4 billion, which the Wall Street Journal notes “suggests Treasury is tapping into the second half…before it has been released by Congress.”

Treasury defended its actions, claiming that “the agency has complied with the [TARP] legislation” because it has not literally dispersed $350 billion, but has merely decided where it would like to send the money:

A Treasury spokeswoman declined to comment Tuesday on whether the newest commitments were based on the assumption that Congress would release the second installment, or would require reallocating money that had been promised to others.

As Sen. Bernie Sanders (I-VT) said, “They are pushing the envelope here…What they are trying to do is create a situation to put pressure on [President-elect Barack] Obama and the Congress to provide the next $350 billion.” Indeed, Treasury has put Obama in a position from which he may have to renege on the department’s promises, if Congress decides to withhold the second TARP installment.

Remember when Pelosi and Reid appealed to the Public; We Must Get this Bail-Out package passed to HELP distressed Homeowners!

As noted before, it is critical that at least a portion of the remaining TARP funds be directed toward foreclosure relief. Sen. Chris Dodd (D-CT) and Rep. Barney Frank (D-MA) are reportedly drafting legislation to do just that, but it appears that Treasury, intentionally or not, is already tying Congress and the next administration’s hands.

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5 Comments
  1. tpt/ny permalink
    January 8, 2009 10:53 pm

    Sorry this is “off topic” ; but I have a request.
    You’ve been great about the Caroline Kennedy thing,
    here goes.
    I just heard Gov. Paterson will be on a NY AM show. They mentioned the senate seat replacement as a topic to be discussed.
    It’s:
    http://www.myfoxny.com
    Find Good Day
    Contact us
    How great would that be IF in the AM there mail box was/is full.
    Feel free to pass this on.
    Night…night

  2. January 8, 2009 11:19 pm

    Yep- Paterson is making the big push now because Hillary’s confirmation is on Tuesday. If all goes well for her… the seat will be vacant.

    All has be quiet re: Caroline!

  3. tpt/ny permalink
    January 9, 2009 6:34 am

    Check you e-mail
    There’s an article saying just that.

  4. January 9, 2009 9:33 am

    Drat! Just as Blago was starting to grow on me…OK, I’m fine now :D

  5. January 9, 2009 11:14 am

    Blago is a cross between Little Caesar and Al Capone. Imagine having him for a next door neighbor.

    tpy/ny..

    I just hope his e-mail box was full. I sent several mails last night.

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