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By Sean Mussenden
January 23, 2009

The House voted yesterday to block President Obama from releasing the second wave of money from the $700 billion bailout of financial institutions.

Because the Senate killed an identical bill last week, the passage of the bill sponsored by Rep. Virginia Foxx, R-5th, is unlikely to stop Obama from distributing to ailing banks and foreclosed homeowners the $350 billion remaining in the Troubled Assets Relief Program.

Congress created TARP at the behest of the Bush administration last fall to help thaw frozen credit markets.  The Bush administration's oversight of the first wave of money prompted protests by both Republican and Democratic legislators after banks held onto the money instead of lending it and the program was expanded to include auto companies.

Foxx, like many Republicans and some Democrats, opposed the program from the start. She and other early TARP opponents argued that it would reward financial companies that made bad decisions while expanding the deficit, projected to hit $1.2 trillion this year.

"Any money that Congress spends is taken from hardworking Americans paying taxes or is borrowed from foreigners," Foxx said yesterday while leading debate on the House floor (Click here to watch video of the debate).

The bill was approved 270-155, with all five North Carolina Republicans in the House voting to block the release of the money. North Carolina Democrats were split.

In the Senate vote last week, Sen. Kay Hagan, D-N.C., voted to release the money, and Sen. Richard Burr, R-N.C., voted to block it.

At this point, only approval of Foxx's bill by both chambers could block the release of the money. There is little chance that the Senate will bring Foxx's version up for a vote, because the Democratic majority wants to let Obama access the money.

"This bill is dead.... This is an exercise," Rep. Barney Frank, D-Mass., the head of the House Financial Services committee, said before the vote yesterday.

The Obama administration has promised several changes to TARP, including improved disclosure by banks receiving money and a plan to direct between $50 billion and $100 billion to homeowners facing foreclosure.
"I know there are serious concerns about transparency and accountability ... confusion about the goals of the program, and a deep skepticism about whether we are using the taxpayers' money wisely," Obama's nominee for Treasury secretary, Timothy Geithner, said at a Senate hearing Wednesday.

On Wednesday, the House passed a bill sponsored by Frank that would have written many of those promised changes into law, but Democratic leaders in the Senate have declined to take it up.  Although Frank said the vote on Foxx's legislation would not stop Obama from using the money, he said that the new president should read it as indication of the public's dissatisfaction with TARP as written and make the promised changes.

"There is a degree of anger in the American public at what they think is a very unfair system that gives benefits unduly and disproportionately to some who caused the problem," he said.

Foxx said in an interview that she was troubled by the "lack of accountability" with TARP and hoped that the strong vote in the House would persuade the Senate to reconsider its decision and bring her bill up for a vote.
"I cannot find where Congress has given the administration a blank check like this," she said. "We're saying, ‘Here's $350 billion. Go to it.'"

Roll Call
Here's how members of North Carolina's delegation voted on the Troubled Assets Relief Program bill. A yes vote was to block release of TARP money.

• VOTING YES: Reps. Howard Coble, R-6th; Virginia Foxx, R-5th; Walter Jones, R-3rd; Larry Kissell, D-8th; Patrick McHenry, R-10th; Mike McIntyre, D-7th; Sue Myrick, R-9th; Heath Shuler, D-11th.

• VOTING NO: Reps. G.K. Butterfield, D-1st; Bob Etheridge, D-2nd; Brad Miller, D-13th; David Price, D-4th; Mel Watt, D-12th.