Well that didn’t take long, did it? Even though they got sidetracked for a day or two by whether or not to seat a replacement for Mr. Obama’s seat, even though they knew they had no choice, Congress started to get down to the business they know and love best. Spending your money.

Today marked the beginning of the process of laying out markers for how the fiscal stimulus plan is going to be structured and who gets the goodies. It’s only a start but judging by the action today, there is a lot of horse trading that is going to go on.

Kicking off the proceedings was our good friend, Barney Frank. He chose to spend his time stipulating the conditions that need to be attached to the expenditure of the remaining $350 billion of the TARP money.

Mr. Frank said he has – with the blessing of Speaker of the House Nancy Pelosi – proposed to the Obama administration that a new set of “conditions” be placed on the remaining $350 billion. He said the “following elements” were necessary for any future spending:

1) Substantial efforts to reduce foreclosures, including a version of a proposal pushed by Federal Deposit Insurance Corp. Chairman Sheila Bair to give incentives to lenders to make loans more affordable.

2) Require banks to tell Congress how money received from the government is being used.

3) Strict requirements that any money given to banks would have to be used to “promote systemic stability and increased lending,” including limits on executive bonuses. Also, there would be limits on how the money is used for acquisitions.

4) Use funds to offer mortgages at low and affordable rates.

5) Assist cities and other tax-exempt issuers who are having a hard time finding investors for their general obligation bonds.

6) Explicit authority to make sure funding is available for automobiles.

If I have time this evening or over the next few days, I’d like to go through this statement in a little more detail. For the moment, I’ll just remark that it is breathtaking in its lack of specificity. Number 6 for example pretty much commits the U.S. to the support of the Detroit auto companies without any so far visible restraints or conditions. Want to bet that it gets tightened up? I’m giving odds against that happening.

On the Senate side, comments were drifting about that amount to nothing more than notice of what various senators intend to carve out for which industries. There was also the slightest of murmurs that the tax cut component might be scaled back just a bit.

Democrats on the Senate Finance Committee will make some “tweaks” to President-elect Barack Obama’s fiscal stimulus plan to add items sought by lawmakers such as a “stronger energy component,” said the tax-writing panel’s chairman.

There is “strong support” among Senate Democrats for additional tax breaks to spur energy production, said Senator Max Baucus of Montana, who held a closed-door meeting today in Washington with Democrats on his committee. He said lawmakers may make a “slight shift” in the portion dedicated to tax cuts.

Baucus’s comments open the window for lawmakers from both parties to seek inclusion of favored issues, said New York Senator Charles Schumer, who attended the meeting. “There was a lot of interesting discussion on how to change certain parts and make it better,” Schumer said.

It looks like we are getting back to business as usual. Think of this as not even the opening act, no, it’s more like a preview of coming attractions. If you thought for one minute that Obama’s plan was going to sail through with minor amendments and be waiting on his desk the day after the Inauguration, think again. If this gets to him by the end of February, I’ll be surprised. I will be even more surprised if it remotely resembles the proposal he delivers to Congress.

more: here and here