The Treasury Department is leaning toward continuing the bank bailout program into next year, the Financial Times reports.
The Treasury wants to keep part of the $700 billion Trouble Asset Relief Program (TARP) in case there’s another financial crisis.
TARP is currently scheduled to end as of Dec. 31. The White House is expected to extend that date until next Oct. 31.
That way it wouldn’t have to go back to a reluctant Congress if it deemed another bailout necessary.
Many in Congress aren’t so happy about that.
“Clearly, I’m against it,” Rep. Jeb Hensarling, R-Tex., told the FT. He’s a member of the House Financial Services committee and the congressional TARP oversight panel.
In an effort to blunt criticism, the White House is bragging that will likely use a lot less than the $700 billion that Congress authorized for TARP.
That argument doesn’t satisfy Hensarling, who said any claim that TARP is helping to restrain the budget deficit is based on “smoke-and-mirrors accounting.”
Democrats are divided as to whether TARP should be extended.
Many financial institutions, including Goldman Sachs, JPMorgan Chase and Morgan Stanley repaid their TARP money early to lessen the government’s control over them.
FDIC Chairwoman Sheila Bair isn’t so keen on TARP, either.
She told PBS, “I just see all the problems it’s created now: the horrible public outcry. It’s had a terrible impact on public attitudes toward the financial system.”
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