President Obama and White House officials today rolled out their plan to spend some of the leftover $200 billion from the TARP (Troubled Asset Relief Program, aka the financial bailout passed in the waning days of the Bush administration) on what amounts to a second stimulus package, but one thing is missing so far: a price tag.
On a conference call with reporters this morning, senior administration officials would not estimate how much the administration wanted to spend in total.
"We're going to be working with Congress on structuring the aspects of the plan," a senior administration official said, noting that "there isn't [an overall price tag] because some of the proposals really are dialable and scalable based on how you design them."
Except for small business loans--which, Obama said, will be administered by the Treasury under the authority of the original TARP bill--the plan is to work with Congress on the broader proposal, presumably passing it as a package of legislation.
"No one's talking about making actual new investments out of the TARP program itself," the official said. "Tim Geithner cannot spent TARP money on highways."
The plan has three prongs: 1) Small business tax cuts, including zero capital gains taxes for small businesses; 2) infrastructure investment--roads, bridges, rail, etc.; and 3) clean energy and efficiency spending, including incentives for manufacturing clean-energy-related products (like parts for wind turbines) and credits for homeowners to make their houses more energy efficient.
Some of it will involve more money for successful programs created under the American Recovery and Reinvestment Act, the original stimulus bill.
The administration is considering infrastructure spending in the range of $50 billion, a senior official said on the conference call--but that was the only number the White House was willing to give out.
Given that the stimulus fluctuated by hundreds of billions of dollars as it traveled through Congress, it might be premature to guess at a final total.
Administration officials touted the fiscal discipline the White House will show in its FY2011 budget proposal, and from President Obama's description of the plan today, it's unclear whether the White House will propose using all $200 billion for the jobs-spurring plan. News that Bank of America will pay back government money throws into question that $200 billion figure as a solid benchmark of how much fiscal "room," as one official put it, the administration has to work with.
"This gives us a chance to pay down the deficit faster than we thought possible and to shift funds that would have gone to help the banks on Wall Street to help create jobs on Main Street," President Obama said today, referencing both the $200 billion and the notion that bank bailouts "once thought to cost the taxpayers untold billions, is on track to actually reap billions in profit for the taxpaying public."
Will some be used to pay down the deficit? Will the administration want to spend more money, given that repayments are on the way? One thing we do know is that Republicans favor the former and Obama's jobs initiative will face opposition from GOPers in Congress who have staked their political identities this year on fiscal restraint.