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Obama scores first congressional win on bailout

Obama scores first congressional win on bailout
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First Published: Fri, Jan 16 2009. 01 04 PM IST
Updated: Fri, Jan 16 2009. 01 04 PM IST
Washington: Still days from taking office, President-elect Barack Obama scored his first victory in Congress, winning Senate approval to spend the second half of the massive $700 billion fund to bailout the country’s teetering financial system.
Majority Democrats also proposed on Thursday increasing to $825 billion Obama’s plan for a second package to stimulate the economy through a combination of federal spending and tax cuts. Passage of both measures would leave Obama with a $1.175 trillion war chest to use against the most dramatic slide in the US economy since the 1930s Great Depression.
Obama on Thursday was to tour a northern Ohio company that manufactures parts for wind turbines, a fitting backdrop to promote alternative energy dollars included his mammoth stimulus package.
Obama’s campaign-style event is the first of a series he’s expected to hold to generate support for his plan to pull the country from recession.
Citing an economy in crisis and worsening, Obama has spent the past two weeks securing lawmakers’ backing for the eye-popping plan that has drawn skepticism from both Republicans and Democrats because of its price tag and tax provisions. He’s now taking his pitch directly to the public and trying to sell the sweeping package to lawmakers’ constituents.
He was headed into his inauguration on Tuesday with powerful momentum and a clear mandate to the steer course of the United States in the midst of a fearsome economic crisis.
A Senate committee overwhelmingly approved the nomination of former rival Hillary Rodham Clinton as secretary of state, and the upper chamber’s Judiciary Committee gave attorney general-designate Eric Holder a relatively easy hearing and was expected to sign off on his appointment as well. Both Cabinet positions will require a vote in the full Senate where both are expected to be approved.
The Senate voted 52:42 to release the second $350 billion of the financial bailout plan that was put in place late 2008, as a number of American financial institutions failed or teetering on the brink of collapse.
The Bush administration’s handling of the first half of the $700 billion package soured many in Congress and the public because of most of the money went to big financial institutions to the detriment of smaller investment houses, banks and homeowners faced with mortgage foreclosures.
Earlier this week, the president-elect lobbied hard on Capitol Hill for release of the money, threatened to veto any bill that blocked its release and promised to alter priorities for its use.
He committed to spending as much as $100 billion to help those faced with losing their homes. Obama said he understood congressional frustration and that he would shake up the program.
“My pledge is to change the way this plan is implemented and keep faith with the American tax payer by placing strict conditions on CEO pay and providing more loans to small businesses, more transparency so that taxpayers can see where their money is spent, and more sensible regulations that will protect consumers, investors, and businesses,” said Obama.
House speaker Nancy Pelosi and Senate Majority Leader Harry Reid, have pledged to have the economic stimulus bill ready for Obama’s signature by mid-February.
The stakes are enormous for Obama. Passage of the plan, and bipartisan passage in particular, would mark a significant achievement at the outset of his presidency as he inherits a recession in its second year from President George W. Bush. Defeat would be a blow, coming not just in his first weeks in office but also as joblessness increases, bank failures continue, investment portfolios shrink and home prices drop.
Bush has faded from scene in the economic crisis even as Obama has assumed a role of presidential proportions while still days shy of taking the oath of office.
The Senate Finance Committee scheduled Treasury Secretary-designate Timothy Geithner’s confirmation hearing on Wednesday, a setback for Obama and Senate Democrats who wanted a quick hearing this week in time for Geithner to be confirmed on Inauguration Day.
His confirmation was tripped up over concerns over his failure to pay $34,000 in taxes, a mistake he corrected after it was pointed out by the US tax collection agency - a bureaucracy that he would run if confirmed. His confirmation is still seen as likely.
Other Obama’s Cabinet nominees making their way through the Senate confirmation process encountered no major snags on Thursday.
The Senate Foreign Relations Committee voted overwhelmingly for Clinton to become the next secretary of state, with lawmakers saying they hoped her leadership would mark a turn from warfare toward diplomacy.
Holder, perhaps the most controversial nominee, seemed to disarm potential critics as he opened on Thursday’s session before the Judiciary Committee by declaring that the practice of waterboarding terrorist suspects was torture.
Holder’s blunt response to the first question at his confirmation hearing was one that many committee members had sought after years of frustrating non-answers on from Attorney General Michael Mukasey and his predecessor, Alberto Gonzales.
The answer also sent a wave of approval through the public viewing gallery where protesters, dressed in orange prison scrubs like those worn by detainees at the Guantanamo Bay military prison, held signs calling for an end to torture.
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First Published: Fri, Jan 16 2009. 01 04 PM IST