Obama Determined to Use the Balance Amount of Bailout Funds to Check Foreclosures

January 26th, 2009 | Tags: Foreclosure Notice

President-elect Barack Obama is determined to use the balance amount of $350 billion from the bailout fund to contain and check foreclosures. The money would not be diverted to help others in different industrial sectors. The decision to release the funds is scheduled to be taken on Thursday 15th January 2009. The legislators were insisting that the assurances given by Obama’s advisors should be inked and signed.

The senators of both parties have become wary since big questions have arisen regarding misuse of the first instalment. Obama supporters disbursed across the Capital on Wednesday to win over the confidence of the legislators. There was a private meeting between the Republicans in the Senate and Larry Summers, the Economic Advisor of Obama as well as Rahm Emanuel, the incoming White House Chief of Staff. It appears that the guarantees given in private were more than what the Obama was willing to publicly discuss.

Obama has requested the Congress to sanction the funds and has been endeavouring to overcome the fears of the legislators. The Democrats are becoming more optimistic that the Senate will not bar the release of the money to the new government. Even the reluctant Republicans wedged in a word of praise for the new president-to-be. Senator Jim DeMint (Republican) said, “These folks have much more credibility already than Secretary Paulson.”

Nevertheless the Republicans were insistent that the conditions be given in writing by the new administration detailing the terms and targets of the funds. Senator John Thune (Republican) said, “There is real concern that it’s one thing to say it in the privacy of that room; it’s another thing entirely to put something on the record.”

Both the parties have come out openly criticizing the handling of the first instalment by the Bush government. The Republicans did not want the funds to help the non-financial sector of the economy. But the money has been used to help General Motors and Chrysler. The minority leader of the Senate Mitch McConnell (Republican) made it categorically clear that they were not in favour of the “industrial policy”. He said, “We’d like to see something publicly stated with reference to that issue.” Barney Frank, the chairperson of Financial Services Committee of the House assured him that the chunk of the money would be utilized to help foreclosure victims.

One of the demands to be placed before the house regarding the money would be that the foreclosure numbers would have to be reduced.