It won't be easy for Treasury Secretary Henry Paulson to get his hands on the next $350 Billion from the Troubled Asset Relief Program (TARP). House Speaker Nancy Pelosi said today that she's asked Rep. Barney Frank, Chair of the House Financial Services Committee, to start working on legislation that would require the Administration to use that money to help stem the tide of mortgage foreclosures. That law would have to pass before any more funds are released. Pelosi and other congressional Democrats have repeatedly reminded Paulson that addressing home foreclosures was a vital provision in the controversial bailout bill passed this fall.
"It was very clearly spelled out in the initial legislation that funds would be used for mortgage foreclosure," Pelosi said. "It's been totally ignored by the administration."
The legislation says that, "to the extent that the Secretary acquires mortgages...the Secretary shall implement a plan that seeks to maximize assistance for homeowners." Since Paulson has not acquired any mortgages, and instead is using the money to inject funds directly into banks, the language does give the Secretary some wiggle room.
President Bush will have to formally ask Congress for the next $350 billion. Of the first $350 billion, there is only about $15 billion left. That money is expected to go to prevent the collapse of American auto companies.