We learn from the office of the Minority Leader in the Senate Mitch McConnell that Obama will face bi-partisan opposition to the release of any more TARP funds until Congress can get a handle on what the heck recipients did with the first $350 billion:

A week before his inauguration as president, Barack Obama is getting a taste today of the difficulty of actually governing the country.

Obama will be making his way to Capitol Hill later in the day to ask Democrats in Congress to approve the second $350 billion from the Troubled Asset Relief Program (a.k.a. the financial rescue bill). However, CQ Today writes, “[A] nasty battle is brewing in Congress between supporters of releasing the funds and those who have voiced considerable discontent over the way Treasury allocated the first half of the funding for its Troubled Asset Relief Program (TARP), enacted last October (PL 110-343). Congress now has 15 days to block the move through a resolution of disapproval, which already has been introduced in the House.”  And USA Today notes, “The request sets up what could be Obama’s first confrontation with Congress, which is controlled by his fellow Democrats.” Indeed, The Wall Street Journal reports that “[s]ome Senate Democrats remain skeptical” of the plan and “[Senate] Republicans who originally supported the plan may be unwilling to support another round.”

The New York Times reports, “The Senate Republican leader, Mitch McConnell of Kentucky, said he was reluctant to provide the additional money. ‘The American people have a lot of questions about how additional funds would be used,’ Mr. McConnell said. ‘I would be hard pressed to support additional funding for the TARP without sufficient assurances this money will not be wasted, misspent or simply used for more industry-specific bailouts.’”

Sen. McConnell added on the Senate floor this morning, “The current administration used these funds for the auto industry, a move that I opposed. Now Congressional Democrats are urging more of the same. The American people still don’t have assurances that this money will not be wasted or misused to play favorites. So far, the incoming administration has not said whether it plans to limit funds to their original purpose or to expand their use to help specific industries.”

Is the free ride over? Not hardly. But it is encouraging that even some Democrats are starting to ask questions. It may turn out that TARP will be shown to be the biggest boondoggle in the history of government anywhere. Nobody knows what the banks have done with all of this loot. No one knows what it was spent on or what it might have been applied to.

We know that many senior managers at these institutions received their year end bonuses as if nothing bad had happened and they deserved them. What we don't know - and what no one in the current administration seems particularly concerned about - is if any of these monies were wasted. There is no audit system set up, no way to keep track of the money once it disappeared down the black hole of these companies who made such horrific judgments that cost us so much.

No doubt Obama will try and crack the whip in order to get Democrats in line and given the fact that Democrats are inclined to support their new president, the chances are pretty good that the rest of the TARP money will be released. But it is also probable that some minimal standards will be applied to the release of this money so at least Congress has an idea of what happens to it.