Lobbyists Gobbling Up $700B Bailout

There's not much left as everyone fights for piece of shrinking pie
By Jason Farago,  Newser Staff
Posted Nov 12, 2008 7:51 AM CST
Neel Kashkari, the Treasury Department's assistant secretary for financial stability, speaks during a news conference, Tuesday, Nov. 11, 2008, in Washington.   (AP Photo/Haraz N. Ghanbari)
camera-icon View 3 more images

(Newser) – That $700 billion allocated in this fall's federal bailout sounded like a lot of money—but after a feeding frenzy led by Washington lobbyists, there's not much cash left over, reports the New York Times. Of the first tranche of $350 billion, only $60 billion remains uncommitted, and everyone from banks to insurers to a Hispanic plumbers' organization is angling for a piece.

The lobbying effort worries bankers, who fear that the battle for Treasury funds will undermine the bailout's original intention—stabilizing the financial system. What's more, Barack Obama has signaled that he might allow the floundering auto industry to apply for funding, further draining resources. But at Treasury the phone continues to ring off the hook, leading one official to lament, "This must have been how the Politburo felt."