Looks like taking money from the TARP fund to support an auto bailout isn’t as much of a slam-dunk as it appeared yesterday. It’s being reported this evening that the WH isn’t quite ready to pull the trigger on a bailout. From Reuters:
President George W. Bush said on Monday an announcement on a auto industry rescue was not imminent, leaving the industry’s fate clouded in uncertainty for a little longer.
Interestingly, this seems to correspond with the appearance of a story that popped from Heritage last night demonstrating that it would be illegal to use TARP money for anything other than financial bailout. The Heritage article reports:
More problematic, however, is Treasury’s lack of statutory authority to direct TARP dollars to the automakers. While the statute, passed by Congress in October, grants the Secretary extremely broad discretion to decide how to employ the funds, it clearly limits the recipients to “financial institutions.” The definition of that term is quite clear:
FINANCIAL INSTITUTION- The term `financial institution’ means any institution, including, but not limited to, any bank, savings association, credit union, security broker or dealer, or insurance company, established and regulated under the laws of the United States or any State, territory, or possession of the United States, the District of Columbia, Commonwealth of Puerto Rico, Commonwealth of Northern Mariana Islands, Guam, American Samoa, or the United States Virgin Islands, and having significant operations in the United States, but excluding any central bank of, or institution owned by, a foreign government.
This definition does not leave much room for interpretation.
Oooopsies. That’s a little hard to argue with, as Heritage states. Now I wouldn’t be surprised to see them try to pull it off anyway, but it would seem to me that they’d have to go back to Congress for a modification of the TARP bill, and based on the rejection of the Big 3 bailout in the Senate, I’d say the odds of such a mod would be pretty slim. But perhaps there are other shenanigans maneuvers that the WH can conduct to get around this restriction. I doubt there would be much reluctance to pull out the stops to get this done since President Bush seems bound and determined to make this happen.
It just gets more interesting every day, doesn’t it?
Moe Lane
Steve Maley
Dan McLaughlin
Neil Stevens
Daniel Horowitz
Illegal?
Brian Simpson (Diary) Sunday, December 14th at 11:18PM EST (link)Hardly.
Congress gave Paulson full control of the plan. There is pretty much zero oversight on the TARP plan. Paulson can pretty much do whatever he wants.
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Important principles may and must be inflexible. ~ Abraham Lincoln
I repeat
Bill S (Diary) Sunday, December 14th at 11:22PM EST (link)Now he can TRY to violate the terms of the legislation, but legal action would be forthcoming.
And as Kenny states, there is the possibility of using GMAC as the “cover” to qualify as a “financial institution”. That’s covered in the Heritage article as well.
“It’s such a fine line between stupid, and clever.” – David St. Hubbins
Eh, I understand that part bs
Brian Simpson (Diary) Sunday, December 14th at 11:38PM EST (link)But two things
1. Who would have standing to sue. My guess is that the courts would probably restrict it to Congress (somehow they may end up being the only ones that a court would feel has standing).
2. I can almost guarantee that Congress (or at least all of the leadership) would look the other way because Paulson handed them what they would feel like a get out of jail free card. He does all the dirty work and they get to continue grandstanding or standing on principle.
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Important principles may and must be inflexible. ~ Abraham Lincoln
I suspect that...
Bill S (Diary) Sunday, December 14th at 11:51PM EST (link)… a few dozen U.S. Senators will have something to say about it, and I predict there will be at least one or two with the backbone to oppose it. It’ll get ugly.
“It’s such a fine line between stupid, and clever.” – David St. Hubbins
Call me a pessimist on this one then.
Brian Simpson (Diary) Monday, December 15th at 12:07AM EST (link)I don’t have much hope that the Republicans will be able to do much to stop this disaster, especially not post-Jan20th.
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Important principles may and must be inflexible. ~ Abraham Lincoln
I agree with you on the post-1/20 front [nt]
Bill S (Diary) Monday, December 15th at 12:09AM EST (link).
“It’s such a fine line between stupid, and clever.” – David St. Hubbins
exactly... and I still say Paulson should give away EVERY PENNY of it
JLenardDetroit (Diary) Sunday, December 14th at 11:32PM EST (link)Not on cent should be left for the OBAMA administration to funnel to the usual Liberal suspects with no strings attached and all Political.
Say… ACORN for one…. remember how many bills they tried to bury funds for them in…. OK, they’ll bury money for them in other things… but you get the idea…
Regards from NoMoTown (the MOTORlessCITY)
“Liberals, looking to do for? America what they’ve done for? Detroit! which is DESTROY IT!”
“I think, therefore I am Conservative”
“Conservative by choice, Republican by necessity”
“You can lead a Liberal to the Truth/Facts, but you cannot make them THINK!”
“Romney [No, not my first choice] does NOT have a MORMON problem. He has a, far too many Americans; these days; are MORONS problem!”
Follow @JLenardDetroit
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Heil “O” Hell No Obamao is NOT MY PRESIDENT! “No U won’t”
I want “O” to FAIL (here, here, & whole Diary (Ofail) here, is why)
“The first Liberal was Satan” – a Rush caller (other Quotes)
Let's see how long it takes for anyone in the media to say.........
Kenny Solomon (Diary) Sunday, December 14th at 11:20PM EST (link)………. that GMAC is a financial institution and so is Chrysler Financial and Ford Credit.
Slide the money through the back door time ?
BTW, did y’all know that Cerberus owns a big chunk of GMAC ? Funny that, eh? A nice investment in Chrysler and they also own a big percentage of GMAC.
That’s ok though. Nothing to see here… Move along you lookie-lou’s.
GMAC already had filed paper-work for change
JLenardDetroit (Diary) Sunday, December 14th at 11:26PM EST (link)to qualify to beg under TARP… like Amex has
Reuters story on that here and Cerberus link also mentioned
Regards from NoMoTown (the MOTORlessCITY)
“Liberals, looking to do for? America what they’ve done for? Detroit! which is DESTROY IT!”
“I think, therefore I am Conservative”
“Conservative by choice, Republican by necessity”
“You can lead a Liberal to the Truth/Facts, but you cannot make them THINK!”
“Romney [No, not my first choice] does NOT have a MORMON problem. He has a, far too many Americans; these days; are MORONS problem!”
Follow @JLenardDetroit
(RS:Help) (JLD) (Hollyweird) (Brain-deads) (SPIN-cycle) (Obamaocare) (Party of kNOw) (Conservatism) (TEApeats) (respectful) (message) (Warning: Children Will Die!!)
Heil “O” Hell No Obamao is NOT MY PRESIDENT! “No U won’t”
I want “O” to FAIL (here, here, & whole Diary (Ofail) here, is why)
“The first Liberal was Satan” – a Rush caller (other Quotes)
GMAC is a legit financial institution
tankertodd (Diary) Sunday, December 14th at 11:38PM EST (link)Please look them up. GMAC may have started from GM but they are a bank. A pretty big bank. I don’t think General Motors could profit from a GMAC “bailout” but who knows. At any rate GMAC and GM are two different firms that require funds for different purposes. The former needs investment to prop up the financial system given the massive deleveraging. The latter needs it because their labor costs are ridiculously high and have no interest in changing that fact.
———————————
The way to stop discrimination on the basis of race is to stop discriminating on the basis of race – Chief Justice Roberts
it was not "a bank holding company"
JLenardDetroit (Diary) Sunday, December 14th at 11:52PM EST (link)GMAC has been around a long time… they also have been in Real Estate loans with GMAC Mortgage for some time…. They, however, lacked the “key” piece (a technical distinction) that did NOT previously qualify them from getting TARP funds under what was being touted as the reasons for the TARP. (refer to the Reuters story in my previous post)
We’ve discussed the lack of any real restrictions on Paulson to hand out monies to anywhere he sees fit… the distinction has more or less become moot… but at the time they (GMAC) as well as AMEX and several others filed the paperwork to change status and qualify them for additional allowed business transactions as well as a play for applying for TARP under the “original” premise.
Regards from NoMoTown (the MOTORlessCITY)
“Liberals, looking to do for? America what they’ve done for? Detroit! which is DESTROY IT!”
“I think, therefore I am Conservative”
“Conservative by choice, Republican by necessity”
“You can lead a Liberal to the Truth/Facts, but you cannot make them THINK!”
“Romney [No, not my first choice] does NOT have a MORMON problem. He has a, far too many Americans; these days; are MORONS problem!”
Follow @JLenardDetroit
(RS:Help) (JLD) (Hollyweird) (Brain-deads) (SPIN-cycle) (Obamaocare) (Party of kNOw) (Conservatism) (TEApeats) (respectful) (message) (Warning: Children Will Die!!)
Heil “O” Hell No Obamao is NOT MY PRESIDENT! “No U won’t”
I want “O” to FAIL (here, here, & whole Diary (Ofail) here, is why)
“The first Liberal was Satan” – a Rush caller (other Quotes)
RedLeader (Diary) Monday, December 15th at 7:32AM EST (link)This brings up an interesting point. Many retail establishments make more off of their credit card branches than they do off of retail sales (see Sears and Victoria’s Secret, I believe). Are they able to qualify for TARP funds, as they are essentially lending institutions that lure customers with their retail product?
I Hereby Establish the Kowalski Financial Institution
kowalski (Diary) Sunday, December 14th at 11:25PM EST (link)The four words: “including, but not limited to” mean that I am a bonafide Financial Institution that is just as eligible for TARP funds as any other institution that falls under the stricter criteria of the statute.
I am therefore directing the Bush Administration to give the $25 billion dollars to ME, so that I can disburse it to the Big Three automobile manufacturers in accordance with a restructuring plan that I promise — PROMISE — I will present here on Redstate. And I’ll make sure I listen to everyone’s advice about how to use the money, including but not limited to all of the ways they think it should be.
I await the check.
Defend Liberty — Join the NRA | Live in Massachusetts? Join GOAL.
I think the Heritage Foundation is wrong
kowalski (Diary) Sunday, December 14th at 11:42PM EST (link)In other words, I think the Heritage Foundation is mistaken. My reading of that excerpt is that TARP gives the administrators of the money the authority to disburse it to anybody they wish, because of the four words:
“…including, but not limited to…”
Those four words grant the government absolute latitude in deciding which organizations are “financial institutions” allowed to receive TARP funds. If they want to get the funds to the Big Three they’ll just have someone establish a “financial institution” that is “not limited to” the definition that follows and disburse it that way.
It is your money, and they are going to spend it as they deem appropriate. Welcome to the 21st Century.
Defend Liberty — Join the NRA | Live in Massachusetts? Join GOAL.
moot point once money is disbursed... they gonna make everyone give it back??
JLenardDetroit (Diary) Monday, December 15th at 12:15AM EST (link)If Paulson leaves it for the next Administration they will not HAGGLE over whether they can disburse as they want regardless of the language… they just will…..
What happened to McCain making them famous!?!?! We heard of some PORK in the original TARP wording (which further bolsters Kowalski’s “not limited to” argument) that helped buy some votes for it…. WHY HAVEN’T WE HEARD THE WHO IT WAS ON BEHALF OF AND WHERE THOSE MONIES WENT!?!?
Lastly, if they decide to do it “legislatively” the Dem controlled Govt on 1/20 will just ram through a change freeing up those funds to be for anything Obama deems fit w/o question…. BUT TO CONTRADICT MYSELF…. Would they (Dem’s) risk the press of a filibuster though? or just go forth under the “not limited to” clause and hand it out (knowing the MSM will cover for them)? WE KNOW THAT ANSWER!
Paulson should hand it all out NOW…. let someone challenge it… they gonna make people give the funds back after they are gone? A complete scrutiny of where ALL THOSE FUNDS FROM THAT LEGISTLATION will finally be asked… including identifying some of the PORK… They don’t want that.
Regards from NoMoTown (the MOTORlessCITY)
“Liberals, looking to do for? America what they’ve done for? Detroit! which is DESTROY IT!”
“I think, therefore I am Conservative”
“Conservative by choice, Republican by necessity”
“You can lead a Liberal to the Truth/Facts, but you cannot make them THINK!”
“Romney [No, not my first choice] does NOT have a MORMON problem. He has a, far too many Americans; these days; are MORONS problem!”
Follow @JLenardDetroit
(RS:Help) (JLD) (Hollyweird) (Brain-deads) (SPIN-cycle) (Obamaocare) (Party of kNOw) (Conservatism) (TEApeats) (respectful) (message) (Warning: Children Will Die!!)
Heil “O” Hell No Obamao is NOT MY PRESIDENT! “No U won’t”
I want “O” to FAIL (here, here, & whole Diary (Ofail) here, is why)
“The first Liberal was Satan” – a Rush caller (other Quotes)
Not a blanket authorization
jackbenimble (Diary) Monday, December 15th at 10:28AM EST (link)I don’t believe those four words offer as a broad a statement of authority as you suggest. A lawyer might argue that they did, but a Court would be guided by the examples which are clearly all FINANCIAL institutions.
I think Jackbenimble’s Loanshark Serivice might qualify for a bailout because it is a financial institution although I might have a little trouble with the regulatory part.
I don’t see how any court rules that an automobile manufacturer is a financial institution.
I think if Paulson tries to disperse this money that a court will issue an emergency stay on that action.
“I repudiate the idea of voting for a Democrat
What's a little law between friends?
DerKrieger (Diary) Sunday, December 14th at 11:28PM EST (link)Since darn near everything the Federal government does is unconstitutional what’s a little law to keep them from doing what they want?
And this story is interesting: http://news.yahoo.com/s/ap/20081214/ap_on_bi_ge/eu_climate_new_partners
“In questions of power, let no more be heard of confidence in man, but bind him down from mischief by the chains of the Constitution.” – Thomas Jefferson
“I cannot undertake to lay my finger on that article of the Constitution which granted a right to Congress of expending, on objects of benevolence, the money of their constituents.” – James Madison
Whenever the legislators endeavor to take away and destroy the property of the people, or to reduce them to slavery under arbitrary power, they put themselves into a state of war with the people, who are thereupon absolved from any further obedience.” — John Locke, 1690
Harry and Nancy just can't catch a break...
rbdwiggins (Diary) Monday, December 15th at 12:07AM EST (link)They wanted so much for President Bush to bear sole responsibility for bailing out the UAW.
Now it seems their fingerprints will have to be all over the deal, but they won’t get to dictate how the money is actually spent unless they completely rewrite the authorization and effectively doom the measure to defeat by attempting to limit Treasury’s discretion.
“Well, the trouble with our liberal friends is not that they are ignorant, but that they know so much that isn’t so.” – Ronald Reagan
Good, send the UAW back to Sen. Corker
JoeG Monday, December 15th at 1:56AM EST (link)The UAW was hoping that they wouldn’t have to deal with Sen. Corker. Now it looks like they will.
I’m sure glad he beat what’s his name back in 2004. I think I’m about to adopt him as my favorite senator.
Kowalski
JoeG Monday, December 15th at 1:57AM EST (link)WordPress is great!!! No more “did my post appear or not?”
It appears in the thread instantly. Good job folks.