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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 McConnellGraham calls on Schumer to hold vote to dismiss article of impeachment against Trump Rove: Chances of conviction rise if Giuliani represents Trump in Senate impeachment trial Boebert communications director resigns amid Capitol riot: report MORE (R-Ky.) and Sen. John McCainJohn Sidney McCainThe best way to handle veterans, active-duty military that participated in Capitol riot Cindy McCain on possible GOP censure: 'I think I'm going to make T-shirts' Arizona state GOP moves to censure Cindy McCain, Jeff Flake 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 ReidThe Memo: Democrats scorn GOP warnings on impeachment Trump, Biden face new head-to-head contest in Georgia The fight begins over first primary of 2024 presidential contest 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 ObamaBiden-Harris team unveils inauguration playlist Can the GOP break its addiction to show biz? The challenge of Biden's first days: staying focused and on message 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 AlexanderCongress addressed surprise medical bills, but the issue is not resolved Trump renominates Judy Shelton in last-ditch bid to reshape Fed Senate swears-in six new lawmakers as 117th Congress convenes 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 CantwellHillicon Valley: Texas, other states bring antitrust lawsuit against Google | Krebs emphasizes security of the election as senators butt heads | Twitter cracks down on coronavirus vaccine misinformation Senators press federal agencies for more information on Russian cyberattack New FCC commissioner's arrival signals gridlock early next year MORE (Wash.), Byron Dorgan (N.D.), Russ Feingold (Wis.), Blanche Lincoln (Ark.), Ben Nelson (Neb.), Jeanne ShaheenCynthia (Jeanne) Jeanne ShaheenBipartisan group of senators: The election is over Seven Senate races to watch in 2022 How Congress dismissed women's empowerment MORE (N.H.) and Ron WydenRonald (Ron) Lee WydenBiden tax-hike proposals face bumpy road ahead Section 230 worked after the insurrection, but not before: How to regulate social media Senate Democrats leery of nixing filibuster MORE (Ore.). Independent Bernie SandersBernie SandersBiden tax-hike proposals face bumpy road ahead Senate Democrats leery of nixing filibuster 'Almost Heaven, West Virginia' — Joe Manchin and a 50-50 Senate 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 BrownFacebook temporarily bans ads for weapons accessories following Capitol riots Biden and the new Congress must protect Americans from utility shutoffs Streamlining the process of prior authorization for medical and surgical procedures MORE (D-Ohio), Edward Kennedy (D-Mass.) and Jim Bunning (R-Ky.). Kennedy paired with Sen. Orrin HatchOrrin Grant HatchMellman: What happened after Ginsburg? Bottom line Bottom line MORE (R-Utah), while Brown paired with Jon TesterJonathan (Jon) TesterSenate Democrats leery of nixing filibuster 50-50 Senate opens the door to solutions outlasting Trump's moment of violence Biden VA pick faces 'steep learning curve' at massive agency 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 BurrOfficials discussing 25th Amendment for Trump following violence at Capitol GOP senator says Trump 'bears responsibility' for Capitol riot Republican infighting on election intensifies MORE (R-N.C.), Saxby ChamblissClarence (Saxby) Saxby ChamblissLive coverage: Georgia Senate runoffs Trump, Biden face new head-to-head contest in Georgia Ex-GOP senator from Georgia suffers mild stroke: report MORE (R-Ga.), Tom CoburnThomas (Tom) Allen CoburnDemocrats step up hardball tactics in Supreme Court fight COVID response shows a way forward on private gun sale checks Inspector general independence must be a bipartisan priority in 2020 MORE (R-Okla.), Susan CollinsSusan Margaret CollinsImpeachment trial tests Trump's grip on Senate GOP 'Almost Heaven, West Virginia' — Joe Manchin and a 50-50 Senate McConnell about to school Trump on political power for the last time MORE (R-Maine), Bob CorkerRobert (Bob) Phillips CorkerGOP lawmaker patience runs thin with Trump tactics Former GOP senator: Republicans cannot let Trump's 'reckless' post-election claims stand Cornyn: Relationships with Trump like 'women who get married and think they're going to change their spouse' MORE (R-Tenn.), John CornynJohn CornynHarris to resign from Senate seat on Monday Cruz, Cornyn to attend Biden inauguration McConnell about to school Trump on political power for the last time MORE (R-Texas), John Ensign (R-Nev.), Lindsey GrahamLindsey Olin GrahamGraham calls on Schumer to hold vote to dismiss article of impeachment against Trump Impeachment trial tests Trump's grip on Senate GOP An attack on America that's divided Congress — and a nation MORE (R-S.C.), Chuck GrassleyChuck GrassleyImpeachment trial tests Trump's grip on Senate GOP McConnell about to school Trump on political power for the last time Overnight Health Care: Biden unveils COVID-19 relief plan | Post-holiday surge hits new deadly records | Senate report faults 'broken' system for insulin price hikes MORE (R-Iowa), Kay Bailey Hutchison (R-Texas), Johnny IsaksonJohnny IsaksonLoeffler concedes to Warnock Hawley to still object to Pennsylvania after Capitol breached Hillary Clinton trolls McConnell: 'Senate Minority Leader' MORE (R-Ga.), Lincoln, Mel Martinez (R-Fla.), McCain, McConnell, Lisa MurkowskiLisa Ann MurkowskiDemocratic lawmaker says 'assassination party' hunted for Pelosi during riot Impeachment trial tests Trump's grip on Senate GOP 'Almost Heaven, West Virginia' — Joe Manchin and a 50-50 Senate MORE (R-Alaska), Ben Nelson, Arlen Specter (R-Pa.) and John ThuneJohn Randolph ThuneImpeachment trial tests Trump's grip on Senate GOP For platform regulation Congress should use a European cheat sheet Streamlining the process of prior authorization for medical and surgical procedures 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 NelsonGeorgia Senate races shatter spending records Georgia voters flood polls ahead of crucial Senate contests The Hill's Morning Report - Fearing defeat, Trump claims 'illegal' ballots MORE (D-Fla.) and Debbie StabenowDeborah (Debbie) Ann StabenowCoronavirus relief deal hinges on talks over Fed lending powers OVERNIGHT ENERGY: Government scientists predicted border wall construction could harm wildlife refuge | Haaland nomination generates excitement in Native American communities | Trump officials wrongly awarded Alaska grant in bid to open Tongass Trump officials wrongly awarded Alaska grant in bid to open Tongass forest to logging: watchdog 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.