This was a vote on approving the release of an additional $350 billion in funds to purchase troubled assets from financial institutions. The purchase of these assets was part of a $700 billion program Congress had approved in 2008 to deal with the severe financial crisis. The first $350 billion had already been released.
Sen. Dodd (D-CT), who supported the release of the funds, acknowledged that neither he, nor any other senator, “likes being here for this debate or believes that this is something they wish they were doing at this hour.” He then went on to describe why the further release of the funds should not be disapproved by saying “we are going through a dramatic situation in our country . . . 17,000 people in our Nation are losing their jobs every day. Nine thousand to ten thousand people are losing their homes every day in America . . . (and) the coming months are going to give us equally bad news on that front. We hear more bad news about lending institutions, financial institutions that are in trouble. So, obviously, these are fragile times, to put it mildly, for our Nation.” Referring to the imminent inauguration of Barack Obama, he said that releasing the additional funds “will give this new President the chance all of us want him to have to get our country moving in the right direction.”
Sen. Sessions (R-AL), who opposed the release, argued that the funds give “to a single, unelected official of the executive branch virtually complete authority to dispense $350 billion--maybe $700 billion, if he receives it--as he alone saw fit and sees fit, I think, has to be considered one of the, if not the, greatest abdications of congressional fiscal responsibility in our Nation's history.” He also said the country did not see any progress resulting from the first $350 billion released and that he wanted the new Obama Administration “to tell us precisely how . . .the (additional) money our American citizens allow them to utilize” will improve the current economic situation before he could approve the expenditure of additional funds.
Sessions also said “I want to know why we haven't had more congressional hearings, more public discussions of what is going on and how we need to fix it. He summarized his opposition by saying “Congress has the power of the purse, but I would suggest to my colleagues, that power is more than a power; it is fundamentally a responsibility. It is a duty to ensure that when we allocate money, we know where it is going and that we have a reasonable expectation of success.”
Sen. Bond (R-MO), who also opposed the further release of the funds, said “I am troubled by Government intervention in the private market. We need the private market at some point, however painful, to work itself out, and we must force the writedown of bad debt to address the solvency of banks. We have not seen those assurances . . . .” Sen. Brownback (R-KS) noted that the original justification for the funds was that they were needed to save the banking system, and “money has been spent and the financial institutions are operating. Certainly, there is a lot of distress, but they are operating and they are operating effectively. So the idea that you have to do it and you have to do it now to maintain a fiscal financial system operating is no longer there.” Brownback also argued that there had been inadequate oversight of the way Treasury was spending the money.
The vote on the resolution was 42-52. Thirty-three Republicans and nine Democrats voted “aye”. Forty-seven Democrats and five Republicans voted “nay”. As a result, the effort to prevent the release of the additional $350 billion funds failed.