As agreed upon in the inconsistently observed oversight rules for the Treasury Department’s $700 billion in TARP funds, the Congress must approve Treasury access to the second half of the sum. The first half was doled out mostly to failing banks, and only $15 billion remains. After the auto bailout went down last night, and the White House said it would push for using TARP funds instead, Treasury officials are hoping that acting on behalf of the Big Three will earn them enough Congressional good will to get at the second installment of the massive bailout fund.
Treasury officials have been pondering how to get access to the second $350 billion, floating the idea of getting Barack Obama to support its release, and formulating a plan for its use. But if there’s $15 billion in the fund now, that would cover the $14 billion Congress was considering with a billion to spare. How would it trigger Congressional consideration of the second half of the bailout, in that case? It won’t, which is why Treasury officials are meeting with Big Three representatives to do their “own evaluation,” the result of which will undoubtedly be conveniently big enough to necessitate dipping into the second half of the TARP funds. Who’s up for a little creative circumvention? There will be no more votes on this until the new year in the Senate, and GM is unsure whether it will survive until January. Both GM and Chrysler have lawyered up for the possibility of bankruptcy. White House spokesperson Dana Perino suggested there were several options for helping auto companies in the light of the bailout bill’s failure, but didn’t specify. Auto industry folks are hoping the Fed might come through with a loan, if TARP funds can’t be used. Meanwhile, a majority of Americans are under no illusions that a bailout now would actually fix any problems in Detroit. Rasmussen shows 53 percent of Americans think the Big Three will be back in Washington– traveling Flintstone style this time, maybe?- even if a bailout goes through now. Smart folks.
