Washington, DC – As the incoming Administration seeks the release of $350 billion in funds designated to help financial service firms, Oregon Senator Jeff Merkley is urging President-Elect Barack Obama to use half the funds to directly aid troubled homeowners.
Last fall, Congress passed a $700 billion bailout of the financial services industry, known as the Troubled Asset Relief Program (TARP), aimed at unfreezing the credit markets. Half the money was made immediately available to the Bush Administration; the other half was held back pending a request for the funds by the President. President George Bush requested those funds earlier this week with the understanding they would be used by the new Obama Administration.
In a letter to Obama, Merkley notes that the troubles financial service firms face were largely a byproduct of troubles in the housing market and a sharp increase in foreclosures. By directly aiding families on the brink of losing their homes, the new Administration can help address the root causes of the current crisis.
“The first $350 billion was distributed to a range of financial institutions on an ad hoc basis with little accountability, and, it appears, little salutary effect. Shareholders, bondholders, and top executives have been bailed out to varying degrees, but hard working families struggling to hold on to their homes have been left out,” writes Merkley. “Our nation’s economic policies have to begin focusing on giving ordinary families economic opportunity once again.”
Merkley encourages President-elect Obama to commit to using half of the new TARP funds – or approximately $175 billion – for foreclosure mitigation efforts to keep families in their homes and help working Americans in the current economic recession.
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