Obama Administration to Receive TARP Balance of $350B

The Senate late Thursday voted down a resolution, sponsored by Sen. David Vitter, R-La., that would have denied the new Obama administration access to the remaining $350 billion in Troubled Asset Relief Program funds. The resolution was rejected by a 52-42 vote. The defeat clears the way for president-elect Barack Obama to use the TARP funds to inject capital into banks, guarantee bad assets and implement foreclosure prevention programs. Meanwhile, on Thursday government officials worked out a deal to invest another $20 billion of taxpayer money in Bank of America, which over the past six months acquired two of the biggest players in subprime: Countrywide Financial, the nation's largest subprime lender/servicer, and Merrill Lynch, the investment banking firm that financed and then invested in several subprime originators. Merrill, which BoA bought in early January, securitized billions of dollars in subprime loans, selling the end bonds in the form of asset-backed securities and collateralized debt obligations. Merrill also invested in CDOs itself, investments that are now on the books of BoA.