Bush to Pass the Buck on Bailout Decisions


MSNBC reported this week that the Bush Administration will leave at least half of the $700 billion bailout fund for President Elect Obama’s people to deal with. Treasury Secretary Henry Paulson has stated that he intends to leave $350 billion of the funds to be distributed according to the wishes of the incoming Obama administration.

Remember when passing this act was so urgent they were freaking out about waiting ‘until Friday’ to pass it? Remember when it was so urgent John McCain suspended his campaign to get in on the conversation?

I guess it wasn’t all that urgent after all. Or was the mere idea of economic stability the urgent component?

(Of course, this was all leaked on the condition of anonymity as the sources were not authorized to disclose the information.)

How to Spend $700 Billion

It may not be that Paulson and company aren’t interested in spending the money. They just might not have time to get it all done by Inauguration Day. According to MSNBC the bailout money is available as follows:

  • $250 billion available immediately
  • $100 billion can be spent without congressional approval
  • $350 billion can be spent only with Congressional approval
    The $700 billion package, which was to be used to purchase troubled assets that banks were carrying on their books is now up for grabs. Paulson declared last week that in fact none of it would be used to buy so-called ‘toxic assets’. Instead, the Treasury Department is looking into investing in banks for partial ownership as well as possibly lending money to failing American auto makers.
    Does it seem to anyone else like the Bush Administration is passing the buck – $350 billion of them?
    Congratulations President Elect Obama! The mess now belongs to you.
    The lesson for the rest of us? Beware of those who claim the sky is falling!

  • Passing the buck in a negative way? No — the truth is straightforward. The $700 b was raised to ease counter-party risk and get the financial system working again (ie get the financial participants to trust each other enough to trade amongst themselves). That has happened. Any more expenditures would be for reasons other than the money was raised. Its that simple.

  • I’m pretty sure the split 350 billion dollar (with congressional approval) was a Congress idea, simply because the democrats didn’t want to give bush 700 billion dollars immediately and the republicans at least wanted a chance to limit the size of the package.

    Truth is, it was just a power grab by congress to be used as a bargaining chip later. Congress now has control over 350 billion dollars for the ‘soooo important’ financial bailout package.

    That’s a lot of power.

    Honestly, though. Take a step back and look at the situation. I’m not a fan of the Bush administration but not EVERYTHING is their fault.

    I actually like the split, one person in charge of 700 billion dollars is a little too much power for my liking.

  • Lela Davidson

    Ted, that sounds great. Are you saying you don’t think the money will ultimately be spent?