President Barack Obama urged congressional leaders to move swiftly on his $825 billion stimulus package while concerns about the government’s Troubled Asset Relief Program, or TARP, continue to emerge.
In a meeting with lawmakers on Friday, Obama acknowledged the reservations about his plan, encouraged members to look at the bigger picture.
"I recognize that there are still some differences around the table and between the administration and members of Congress about particular details on the plan," he said. "But I think what unifies this group is a recognition that we are experiencing an unprecedented, perhaps, economic crisis that has to be dealt with, and dealt with rapidly."
Obama said he hopes to see passage of the plan by President’s Day weekend.
The package, which aims to create or save between three and four million new jobs, faces particular criticism from Republican leaders, who fear the package is too expensive and won’t result in any short-term aid for the economy.
House Republicans on Friday told the president that the proposed $825 billion stimulus plan puts too little emphasis on tax cuts -- and offered a plan of their own. In their version of the stimulus bill, the two lowest-income tax brackets would see a reduction, so that the 15% rate would be lowered to 10% and the current 10% rate would be cut to 5%. The plan also includes a proposal to offer small businesses a tax deduction equal to 20% of their income.
The Republicans were unable to give a cost estimate for their plan, but said it would result in an average savings of $1,700 per family. Obama is scheduled to meet with House Republicans next week, though at that point, the House bill could already be awaiting a vote.
Also on Friday, Senate Finance Committee Chairman Max Baucus (D-Mont.) rolled out a $275 billion tax cut plan to be considered by the Senate on Jan. 27. The plan, which overlapped significantly with the House version, would allocate $30 billion to tax incentives for the energy sector. The plan would also increase the federal government’s borrowing authority to $12.14 trillion from $11.315 trillion in anticipation of the trillion-dollar deficits expected over the next few years, according to a release by Baucus’ office.
On Thursday, the House of Representatives voted against the release of the remaining $350 billion in TARP money. The vote however, was purely symbolic -- the Senate already approved its release, making a vote in the House unnecessary. Still, the House’s vote was a testament to criticism of the controversial program, which many say has failed to adequately jolt the credit markets and aid distressed homeowners.
Hoping to plug one of TARP’s holes-- its alleged lack of transparency -- the program’s special inspector general sent a letter to Rep. Spencer Bachus (R-Ala.) outlining a series of new measures on Thursday.
The letter, crafted by Neil Barofsky and obtained by FOX Business, informs Bachus of a “significant oversight initiative” that will be launched to lift the veil on how firms that received TARP funding have spent their money.
“The current lack of transparency directly implicates SIGTARP’s oversight mission because it has the potential to erode the trust of the public in the effectiveness and integrity of TARP, potentially putting at risk the legitimacy of the entire program,” Barofsky wrote.
Barofsky plans to ask each TARP-funded firm to provide an outline of how they expect to use their funds, supporting documentation, a description of their plans for complying with executive compensation restrictions and certification by an authorized senior executive to ensure all material is accurate.
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