The Washington Post reports that:
Treasury Department officials are laying the groundwork for seeking the second half of the $700 billion financial rescue package from Congress ... [but w]ith lawmakers on both sides of the aisle expressing heated opposition to such a request, Treasury officials have come to realize that they need the president-elect's help to obtain the rescue money, the sources said.
The Treasury aired the possibility of seeking the second half of the funds with transition team officials, who said they would attend a meeting with lawmakers and the Bush administration if the department pulled one together.
Obama has not yet stated whether the Treasury should receive the rest of the funds. But in agreeing to allow his aides to meet with administration officials and lawmakers on the issue, Obama appears to be demonstrating his willingness to engage on the issue, two of the sources said.
In a meeting with Treasury officials, Obama's transition team pressed them to use the second installment, if forthcoming, to help struggling homeowners.
Consider me not encouraged in the slightest by this development. Not that Paulson wants the second $350 billion to throw at properly connected Wall Street cronies, which was a virtual certainty anyway, but that Obama as President-elect rather than candidate is willing to play along.
When Obama was a candidate, not wanting to be seen as standing in the way of Economic Rescue could be excused. As President-elect, though, this will say a lot about his priorities and will preview his Administration.
Granted, he is being typically cautious and leaving his options open, while generally being cooperative; and granted the odds of the necessary 2/3 of both Houses of Congress voting against the second tranche (yes, that is more of that marvelous "oversight" Congress touted in the Bailout Bill) are infinitesimal and none; nevertheless the mere idea that Obama is willing to participate in Wall Street Kleptocracy is disheartening.
And no, I'm not reassured by the meme that Obama is insisting that the second tranche "help struggling homeowners". The vast majority of Americans did not buy into the housing bubble, did not HELOC to the max to buy SUVs and other toys, and did not trade in a reasonable tract home for a status-symbol half-empty McMansion. "Helping struggling homeowners" at least in part means that the prudent and the thrifty, many of whom are also in financial distress due to job losses, and increasing food costs and health premiums, get stuck with the bill in order to aid the reckless and the spendthrift.