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Friday, 16 January 2009

President-Elect Obama on the Senate Vote to Release 2nd Half of the Financial Rescue Plan

The Senate voted today to release the second half of the $700 billion financial rescue plan, which will now be overseen by the incoming Obama Administration. In a statement released after the vote, President-elect Obama acknowledged the frustrations that many Americans have felt over how the first of half of the plan was used, and he pledged to increase transparency and accountability while ensuring that more money reaches struggling homeowners and small businesses:

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.

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. There was too little transparency and accountability, and it didn't do enough to get credit where it's needed most -- small businesses and families struggling to keep their jobs and make ends meet. Now my pledge is to change the way this plan is implemented and keep faith with the American tax payer by placing strict conditions on CEO pay and providing more loans to small businesses, more transparency so that taxpayers can see where their money is spent, and more sensible regulations that will protect consumers, investors, and businesses.

Earlier in the day Lawrence Summers, President-elect Obama's incoming Director of the National Economic Council, sent a letter to the bipartisan leaders of the Senate and House of Representatives outlining in detail the President-elect's commitment to accountability and transparency in the use of these funds. The letter also pledged to use the money in a way that will help preserve home ownership, promote jobs and economic recovery, increase lending, promote the stability of the financial system, and safeguard taxpayer interests.

The letter outlined four key goals:

1) Providing a clear and transparent explanation for investments

2) Measuring, monitoring and tracking the impact on lending

3) Imposing clear conditions on firms receiving government support

4) Focusing support on increasing the flow of credit

Other important elements include limiting executive compensation, preventing banks from using government funds to purchase healthy firms rather than to boost lending, and disclosing information online so that American American people readily can monitor the status of each investment made by the Treasury Department.

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