$350-Billion Foreclosure Fund: Obama’s First Test in Senate

January 20, 2009 by Peter Vernon on Foreclosure Crisis, Foreclosure Help

Barack Obama, who is just a few days away from being inaugurated as the 44th and the first African-American U.S. president, is facing his first big test in the Senate. Democratic and Republican senators have been debating whether to give him the second $350 billion of the Troubled Asset Relief Program fund for his own foreclosure prevention program.

The official request for the money was carried out by President Bush after Obama called him on January to ask for the release.

But Republicans have expressed their opposition to the release of the second half, citing public outrage at what the Bush administration did with the first $350 billion of TARP. According to Senate aides, Louisiana Republican Senator David Vitter has introduced a resolution to reject Obama’s request.

To respond to opposition, Obama’s economic advisers and Democratic supporters in Congress have been sending letters to fellow legislators, addressing their concerns about foreclosures and the financial industry. Most legislators have been disappointed by how Bush’s Treasury Secretary Henry Paulson used the first half. They claimed that Paulson wasted the money when he poured it into the coffers of distressed financial firms and banks, which have not yet done anything concrete to contribute to foreclosure mitigation.

Even so, Senators Christopher Dodd and Richard Durbin and other Democratic senators are positive that the money would be released, although Dodd said the vote would not be overwhelming. Senators know how the public had been frustrated by the perceived unfairness of helping giant institutions while leaving homeowners in the claws of foreclosure.

If the money is blocked by the Senate, Obama said he would use his veto power, as he previously asserted in his meeting with Democratic senators. One of his campaign promises in 2008 was to rescue troubled homeowners from foreclosure. For him to fulfill that, he has to use all within his power to get the money.

Learn more how to Obama Team Promisses Use Part Of Bailout Fund For Reducing Foreclosures.