Treasury Secretary Tim Geithner should shutter the Troubled Assets Relief Program (TARP) in the next three months and get the U.S. government out of the business of running banks and industrial companies, argues Sen. John Thune (R-SD).
Writing in The Wall Street Journal, Sen. Thune, a leading voice on financial regulation in the Congress, noted that the Treasury secretary has the power under the law to “either allow the program to expire at the end of this year or extend it into next fall.”
Sen. Thune prefers the latter option as an “exit strategy” for the government.
“Ending TARP this year is a vital first step to getting the federal government out of these expensive and risky entanglements in private industry,” writes Thune.
“Shutting down TARP would also ensure we don't risk losing more taxpayer dollars.”
The most recent report by the TARP Congressional Oversight Panel determined that nearly $330 billion of the $700 billion limit is currently unused.
Letting TARP end this year and cancelling that remaining $330 billion “would remove the inevitable temptation to spend it,” writes Thune.
“With a budget shortfall expected to hit a record $1.6 trillion this year and a staggering $9 trillion over the next 10 years, we should be looking for every possible way to reduce the risk we are taking on behalf of taxpayers,” the Senator notes.
Others agree that continuing TARP is risky, and note that the TARP program does not have a lot of authority.
The Treasury Department “lost credibility” when it claimed its first capital injections from the $700 billion financial rescue were for healthy banks, the inspector general for the Troubled Asset Relief Program, Neil Barofsky, said in an interview with Bloomberg TV.
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