First Chris Dodd came out today and said the Bush Administration would tap the TARP for the auto bailout. Now Nancy Pelosi has said the same. The administration has not ruled out using TARP funds but would like to find the money elsewhere in the budget. Why are the Democrats on the Hill so desperate to see this relatively small bandaid come from the TARP? Because there is more than $350 bln held in reserve, most of which will be left up to the incoming administration to disperse. If they can get political cover from Bush diverting funds from the program’s original purpose (to stabilize financial markets), then they can direct the dough to favored constituencies and away from Wall Street. Wall Street, you may have noticed, doesn’t poll well.
Pelosi also says she sees economic stimulus of around $600 bln, with a combinatuion of spending and tax cuts.
