WASHINGTON – Senator Chuck Grassley today joined senators in co-sponsoring an amendment to the Debt Limit Extension bill that would end the Troubled Asset Relief Program, or TARP, immediately, and prevent another $319 billion in government spending. The amendment was defeated by a vote of 53-45. Sixty votes were needed to pass the amendment.
The law allowed the Secretary of the Treasury to extend the program beyond the original December 31, 2009 end date. Treasury Secretary Timothy Geithner used that authority, so the bailout program will continue through October 3, 2010. According to figures provided by the Office of Financial Stability, there is $319 billion of unobligated TARP funding.
“The responsible thing to do is shut down this bailout program. We’re still sitting at 10 percent unemployment, even after the President said massive government spending would be needed to keep unemployment under 8 percent. The simple fact of the matter is that TARP isn’t working. And, if the Democratic majority really wanted to end the influence of Wall Street, they would end the bailout. Instead, taxpayers are going to see more of the same bailouts and big bonuses to those who got us into this mess,” Grassley said. “The TARP fund was supposed to make sure credit flowed to Main Street, America, and instead the program was used as a slush fund to pick winners and losers in New York and Detroit, leaving small businesses and families without credit in today’s struggling economy.”
The amendment would have eliminated the Treasury Department’s authority to make new obligations under TARP, and it would have reduced the debt limit increase proposed by the underlying bill by an amount equal to the funds paid by TARP recipients after date of enactment.
Last year, Grassley and 39 other senators, led by Senator John Thune of South Dakota, wrote to Geithner urging him to allow the bailout program to expire this year. Their letter said, “Subsequent to enactment of this legislation ... TARP has been used by the federal government to acquire ownership stakes in banks, financial institutions, and automakers. This direct investment certainly was not the intention of Congress in passing this legislation. In fact, Congress explicitly rejected legislation to provide federal funds to bail out car manufacturers.”
Grassley has been an outspoken critic about the lack of transparency with how TARP funds have been used. The Special Inspector General for the program was created at the urging of Grassley and Senator Max Baucus of Montana, and when the Treasury Department changed the focus of the program less than a month after it began, Grassley worked with Senator Claire McCaskill of Missouri to retool the Inspector General’s authority and empower the office to adequately scrutinize TARP spending and management.
Grassley has gone to bat for the Inspector General when the White House and Treasury Department put up barriers to the Inspector General asking questions and collecting information about where the money has gone.