GOP leaders are making it clear that they want to see a light at the end of the tunnel for the Troubled Asset Relief Program, or TARP, the $700 billion rescue plan they fear has become an endlessly revolving bailout fund, according to a report in Politico.
The Obama administration wants to hold onto TARP funds repaid to Uncle Sam by recovering banks – for possibly bailing out yet other banks -- while the GOP wants those billions to go to paying down the national debt.
And some Republican lawmakers are getting set to force the issue.
Rep. Jeb Hensarling, R-Texas, has introduced a bill that would set a target date to end the TARP program – the Treasury could not divvy out any remaining TARP money after Dec. 31, 2009. Furthermore, the bill would restrict Treasury from refusing to let banks repay their funds.
Hensarling charged that TARP has “morphed into essentially a $700 billion revolving bailout fund where Washington is using its tentacles to essentially control our major auto companies, our major financial institutions, and a major insurance company.”
Meanwhile, Sen. John Thune, R-S.D., has introduced legislation that would require the federal government to end ownership of private firms by July 1, 2010 -- and would proscribe any future use of TARP dollars to purchase new ownership shares, according to Politico.
“This money is not a discretionary slush fund for the Treasury and the Obama administration,” Thune said. “Congress controls the power of the purse, and this money should be directed toward debt reduction. Treasury has greatly expanded the original intent of the TARP funds, and spending those funds that have been returned as they see fit is unacceptable and puts taxpayer dollars at greater risk.”
The legislative initiatives have been accompanied by appeals to the Chief Executive.
A cadre of House Republicans, including the GOP leadership, sent President Barack Obama a much publicized letter last week prompting him to use the repaid TARP funds to “pay down the national debt and help restore lost confidence among American taxpayers.”
Currently at the heart of the TARP controversy are the 10 big banks set to return loans from the Troubled Asset Relief Program (TARP), according to a report in The Hill. That amounts to $68 billion, including an estimated $1.8 billion in dividends and interest, according to Ethisphere, which has been auditing the program.
But Taxpayers will be robbed of any profit if the money is simply recycled by the administration.
Furthermore, such recycling will add insult to injury, as the big picture re TARP shows that the government’s investment in the program is currently in the hole to the tune of $151.6 billion, according to Ethisphere. That translates into a loss of $1,136 on TARP by each taxpaying household in the U.S., according to The Hill.
No matter how the arithmetic plays out, however, some top Democrats are voicing support for the administration’s decision to keep the returned TARP money on hand for future emergencies.
“It means that the government will have additional resources to address continuing needs without having to ask taxpayers for more money or increasing borrowing,” House Financial Services Committee Chairman Barney Frank, D-Mass., wrote in a recent letter to committee members.
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