Obama will get $1 trillion for stimulus, Frank says

House Democrats intend to give President-elect Barack Obama $1 trillion to deploy for economic recovery programs as early as the middle of February, Financial Services Committee chairman Barney Frank, D-Mass., told more than 100 business leaders at a breakfast organized by The New England Council today in Boston. The organization is based in Boston. The timetable for congressional approval of an economic recovery plan is realistic, Mr. Frank said. Also, amendments will be proposed to the Troubled Asset Relief Program for use of the remaining $350 billion allocated for the program, including putting more money toward affordable housing and helping homeowners avoid foreclosures. “In the economic recovery program we will spend $10 billion to keep projects that give low-income people housing tax credits going,” he said. “And we will spend no less than $40 billion to reduce foreclosures. We are not going to solve this dilemma until we do something about foreclosures.” The program will also provide more money for smaller banks. And there is no question that government is planning more regulation for the financial markets, Mr. Frank said. “We need to put in rules that will restrain excessive risk. Our main goal right now will be to give somebody in the federal government greater powers to regulate so that too much risk isn’t taken on. That’s probably going to be the Federal Reserve,” he said. The enhanced rules will focus on systemic risk. “It will focus on the activity, not institutions,” Mr. Frank said. “Basically we are saying, ‘Please do not incur more debt than you can possibly pay off.’ That’s as simple as it gets.”