WASHINGTON --- Senator Chuck Grassley is asking a White House official to account for the contradiction between a White House blog post and statements from the Secretary of the Treasury and other officials about the relationship of the Small Business Lending Fund, or SBLF, to the Troubled Asset Relief Fund, or TARP.
“There was a lot of concern last year about this small business program being another government bailout like TARP. Supporters insisted it would not be. Instead, they promised it would be a way to help small businesses get back on their feet and create jobs,” Grassley said. “Unfortunately, and with $30 billion on the hook, it seems like the skeptics were correct. So far, the small business loan fund may primarily have created jobs for banks shuffling public money around. Beyond that, some smaller banks indicate they don’t even want to use the fund because of the red tape and uncertainty involved.”
In a letter sent today to Ms. Jennifer Psaki, Deputy Assistant to the President and Deputy Communications Director, Grassley asked for responses to questions about whether Congress passed the Small Business Jobs Act without receiving fully accurate information from the White House about the contents of the program. The $30 billion SBLF was created by legislation Congress passed last fall and with assurances from the measure’s supporters in the Democratic leadership and the White House, including the blog post in question, that the fund was separate from TARP.
Earlier this year, Grassley expressed concern about reports about big banks using taxpayer money from the SBLF to repay TARP loans. In response to questions from Grassley, Secretary of the Treasury Tim Geithner said last month that it was okay for banks to use the funds that were said to be for small business loans to repay TARP loans. Earlier in the spring, the Acting Assistant Secretary of the Treasury said of the department’s decision to approve applications for SBLF dollars by TARP recipient banks: “I do expect them to approve the applications of many TARP recipients to their loans under the small business lending fund.”
Grassley said these statements directly contradict assertions posted on the White House website last year by Psaki. Her post was presented as a fact check of an Associated Press story about the SBLF. Psaki labeled as “FICTION” a part of the report that said: “The administration’s haziness about whom the program (the SBLF) benefits has fueled comparisons to the $700 billion bailout known as the Troubled Asset Relief Proram, or TARP.” Psaki also claimed as a “FACT” that the SBLF is “…separate from TARP.” This blog post was used during Senate debate in support of the Small Business Jobs Act.
Grassley has conducted extensive congressional oversight of TARP. A year ago, he exposed the misleading nature of a General Motors and Treasury Department public relations effort over how General Motors had repaid its government loan. In 2008, he was behind the effort to create a Special Inspector General to oversee the use of TARP funds. Grassley subsequently went to bat for that Special Inspector General when the White House and Treasury Department put up hurdles to public disclosure of who received TARP dollars.