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Senate votes to send last $350B of TARP to Obama

The Senate on Thursday narrowly approved granting the final half of the $700 billion bailout package to the incoming Obama administration.

In a 42-52 vote, the Senate rejected a resolution sponsored by Sen. David VitterDavid Bruce VitterBiden inaugural committee to refund former senator's donation due to foreign agent status Bottom line Lysol, Charmin keep new consumer brand group lobbyist busy during pandemic MORE (R-La.), disapproving the release of the funds.

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Most Republicans supported Vitter, with 33 voting in favor of not releasing the funds. Most Democrats, including their leadership team, voted to support giving the funds to President-elect Obama.

Senate Minority Leader Mitch McConnellAddison (Mitch) Mitchell McConnellSchumer works to balance a divided caucus's demands Lobbying world The Memo: Biden moves into new phase of COVID-19 fight MORE (R-Ky.) and Sen. John McCainJohn Sidney McCainBudowsky: Liz Cheney vs. conservatives in name only Cheney slams Trump on 'big lie' over election Exclusive — Cruz, Rubio ramp up criticisms of big business MORE (Ariz.), the 2008 GOP presidential candidate, both voted against releasing the funds.

The $700 billion package known as the Troubled Asset Relief Program (TARP) has been criticized heavily by lawmakers, the Government Accountability Office and the congressional oversight panel established to investigate how the funds are spent. The first $350 billion of the package has already been committed by the Treasury.

Obama released a statement praising the vote.

“Restoring the economy requires that we maintain the flow of credit to families and businesses. So I’m gratified that a majority of the U.S. Senate, both Democrats and Republicans, voted today to give me the authority to implement the rest of the financial rescue plan in a new and responsible way,” Obama said. “I know this wasn’t an easy vote because of the frustration so many of us share about how the first half of this plan was implemented.”

Senate Majority Leader Harry ReidHarry Mason ReidBiden's first 100 days is stylistic 'antithesis' of Trump The Memo: Washington's fake debate on 'bipartisanship' The Hill's Morning Report - Presented by Tax March - CDC in limbo on J&J vax verdict; Rep. Brady retiring MORE (D-Nev.) rallied the Senate to reject the disapproval resolution on the grounds that the new president would learn from the mistakes in the way the initial funds were used.

Barack ObamaBarack Hussein ObamaGender politics hound GOP in Cheney drama Never underestimate Joe Biden Afghanistan withdrawal: Trump fumbles, Biden scores MORE has made it clear that he understands the mistakes of the prior administration and will not repeat them,” Reid said minutes before the vote. “I believe this is the road to a recovery for our country. Let’s just trust Barack Obama.”

Minority Whip Jon Kyl (R-Ariz.) also voted against the disapproval resolution. He said he voted for the first TARP disbursement in October because the financial system was in such a state of peril.

“The same circumstances that called for the initial $350 billion pertain today,” Kyl said.

Kyl added that officials in the incoming administration had assured him they intended to dedicate the funds to shoring up financial markets, and not to “prop up failing companies” outside of the funds targeted to the auto industry by the Bush administration.

The auto loans have been particularly unpopular with Republican senators.

Newly sworn-in Sen. Roland Burris (D-Ill.) cast his first vote in favor of releasing the funds. Vice President-elect Biden, just ahead of his resignation from the Senate, cast the final Senate vote of his 35-year career to reject the resolution. Democratic leaders timed the vote before Biden’s resignation.

Crossing the aisle to support Democrats on the TARP resolution were GOP Sens. Lamar AlexanderLamar AlexanderThe Republicans' deep dive into nativism Senate GOP faces retirement brain drain The Hill's Morning Report - Presented by the National Shooting Sports Foundation - CDC news on gatherings a step toward normality MORE (Tenn.), Judd Gregg (N.H.), Kyl, Richard Lugar (Ind.), Olympia Snowe (Maine) and George Voinovich (Ohio).

{mospagebreak}Crossing over to support Republicans were Democrats Evan Bayh (Ind.), Maria CantwellMaria Elaine CantwellWill Biden's NASA win the space race with China? Bill Nelson is a born-again supporter of commercial space at NASA Biden looks to bolster long-term research and development MORE (Wash.), Byron Dorgan (N.D.), Russ Feingold (Wis.), Blanche Lincoln (Ark.), Ben Nelson (Neb.), Jeanne ShaheenCynthia (Jeanne) Jeanne ShaheenIf Taliban regains power, they would roll back rights for women: US intelligence Manchin says he doesn't support DC statehood, election reform bills Overnight Defense: Gillibrand makes new push for military sexual assault reform | US troops begin leaving Afghanistan | Biden budget delay pushes back annual defense policy bill MORE (N.H.) and Ron WydenRonald (Ron) Lee WydenOvernight Health Care: Biden sets goal of at least one shot to 70 percent of adults by July 4 | White House to shift how it distributes unallocated vaccines to states Pallone commits to using 'whatever vehicle I can' to pass Democrats' drug pricing bill Access to mental health services dwindled as pandemic need strained providers: GAO report MORE (Ore.). Independent Bernie SandersBernie SandersPBS White House reporter Yamiche Alcindor to moderate 'Washington Week' Pressure builds for Biden to back vaccine patent waivers Democrats confront difficult prospects for midterms MORE (Vt.), who caucuses with Democrats, also supported Republicans in voting against disbursing any more TARP money.

Absent from the vote were Sens. Sherrod BrownSherrod Campbell BrownOn The Money: How demand is outstripping supply and hampering recovery | Montana pulls back jobless benefits | Yellen says higher rates may be necessary Senate Democrats announce B clean bus plan On The Money: Incomes, consumer spending soared in March | Harris, senators work behind scenes on jobs package | Biden cancels some border wall construction MORE (D-Ohio), Edward Kennedy (D-Mass.) and Jim Bunning (R-Ky.). Kennedy paired with Sen. Orrin HatchOrrin Grant HatchBottom line The Republicans' deep dive into nativism Press: Forget bipartisanship — it's dead! MORE (R-Utah), while Brown paired with Jon TesterJonathan (Jon) TesterAmericans for Prosperity launches campaign targeting six Democrats to oppose ending filibuster Overnight Defense: Gillibrand makes new push for military sexual assault reform | US troops begin leaving Afghanistan | Biden budget delay pushes back annual defense policy bill Gillibrand makes new push for military sexual assault reform MORE (D-Mont.) — a process by which senators withhold their votes to cover for another’s absence in the final total.

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Senators who supported the first TARP disbursement in October but opposed the second include Bayh, Kit Bond (R-Mo.), Richard BurrRichard Mauze BurrFDA unveils plan to ban menthol cigarettes, flavored cigars The Hill's Morning Report - Biden to country: 'Turning peril into possibility' Budd to run for Senate in NC MORE (R-N.C.), Saxby ChamblissClarence (Saxby) Saxby ChamblissEffective and profitable climate solutions are within the nation's farms and forests Live coverage: Georgia Senate runoffs Trump, Biden face new head-to-head contest in Georgia MORE (R-Ga.), Tom CoburnThomas (Tom) Allen CoburnWasteful 'Endless Frontiers Act' won't counter China's rising influence Congress brings back corrupt, costly, and inequitably earmarks Conservative group escalates earmarks war by infiltrating trainings MORE (R-Okla.), Susan CollinsSusan Margaret CollinsRomney defends Cheney: She 'refuses to lie' The Memo: Trump's critics face wrath of GOP base Allies of GOP leader vow to oust Liz Cheney MORE (R-Maine), Bob CorkerRobert (Bob) Phillips CorkerThe Republicans' deep dive into nativism Fox News inks contributor deal with former Democratic House member Senate GOP faces retirement brain drain MORE (R-Tenn.), John CornynJohn CornynCornyn is most prolific tweeter in Congress so far in 2021 Schumer 'exploring' passing immigration unilaterally if talks unravel Trump muddles Republican messaging on Afghanistan MORE (R-Texas), John Ensign (R-Nev.), Lindsey GrahamLindsey Olin GrahamMichael Flynn flubs words to Pledge of Allegiance at pro-Trump rally Police reform talks ramp up amid pressure from Biden, families Victims' relatives hold Capitol Hill meetings to push police reform MORE (R-S.C.), Chuck GrassleyChuck GrassleyGrassley asks Blinken to provide potential conflicts involving John Kerry Overnight Defense: Gillibrand makes new push for military sexual assault reform | US troops begin leaving Afghanistan | Biden budget delay pushes back annual defense policy bill Gillibrand makes new push for military sexual assault reform MORE (R-Iowa), Kay Bailey Hutchison (R-Texas), Johnny IsaksonJohnny IsaksonLoeffler group targets Democrats with billboards around baseball stadium Warnock raises nearly M since January victory Five big takeaways on Georgia's new election law MORE (R-Ga.), Lincoln, Mel Martinez (R-Fla.), McCain, McConnell, Lisa MurkowskiLisa Ann MurkowskiTrump muddles Republican messaging on Afghanistan Trump drama divides GOP, muddling message Moderate Republicans leery of Biden's renewed call for unity MORE (R-Alaska), Ben Nelson, Arlen Specter (R-Pa.) and John ThuneJohn Randolph ThuneTrump muddles Republican messaging on Afghanistan The Memo: Trump's critics face wrath of GOP base GOP wrestles with role of culture wars in party's future MORE (R-S.D.).

Changing their minds from opposing the first TARP disbursement in October but supporting the second on Thursday were Sens. Tim JohnsonTimothy (Tim) Peter JohnsonCornell to launch new bipartisan publication led by former Rep. Steve Israel Trump faces tough path to Fannie Mae, Freddie Mac overhaul Several hurt when truck runs into minimum wage protesters in Michigan MORE (D-S.D.), Mary LandrieuMary Loretta LandrieuCassidy wins reelection in Louisiana Bottom line A decade of making a difference: Senate Caucus on Foster Youth MORE (D-La.), Bill NelsonClarence (Bill) William NelsonCrist launches bid for Florida governor, seeking to recapture his old job The Hill's 12:30 Report - Presented by ExxonMobil - Trump, Cheney trade jabs The Hill's Morning Report - Presented by Emergent BioSolutions - Biden sales pitch heads to Virginia and Louisiana MORE (D-Fla.) and Debbie StabenowDeborah (Debbie) Ann StabenowOvernight Health Care: Biden sets goal of at least one shot to 70 percent of adults by July 4 | White House to shift how it distributes unallocated vaccines to states The Hill's Morning Report - Presented by Emergent BioSolutions - Can Cheney defy the odds and survive again? Overnight Health Care: WHO-backed Covax gets a boost from Moderna MORE (D-Mich.).

Last October’s bailout was originally designed to give Treasury the financial power to buy up vast numbers of troubled assets, but as financial markets deteriorated sharply in the fall, the department abruptly shifted course.

Instead of troubled assets, Treasury officials allocated $250 billion to purchase equity stakes in banks, and then used the rest of the first half of the package to support a range of other institutions, including insurance firm AIG.

While Kyl voted for the bill, most Republicans rejected releasing the funds. Sen. Sam Brownback (R-Kan.) called TARP “a rather large slush fund,” while Sen. Jim DeMint (R-S.C.) told senators to support the resolution of disapproval to “slow down this avalanche of spending and debt.”

Thursday’s vote was a close call for Obama and his team, who had staked significant political capital on getting the money so the administration could act quickly to repair the economy by easing the flow of credit. Obama came to the Capitol on Tuesday to press his case personally for the money, and incoming Chief of Staff Rahm Emanuel and Obama economic aide Lawrence Summers followed on Wednesday for a Q-and-A with Senate Republicans.

In a letter to Reid on Thursday aimed at soothing opposition, the Obama administration pledged to devote up to $100 billion of the rest of the funds to reduce home foreclosures, and Summers also pledged that the new administration would take specific steps to improve accountability.

“No substantial new investments will be made under this program unless President-elect Obama has reviewed the recommendation and agreed that it should proceed,” Summers wrote Reid.

Summers said the foreclosure funds will add up to somewhere between $50 billion and $100 billion, in a “sweeping effort to address the foreclosure crisis.” The rest of the money would be used towards the financial markets specifically and not to support a broader range of investments in America’s corporate world, he said.

“The incoming Obama administration has no intention of using any funds to implement an industrial policy,” Summers wrote.