Idaho Congressman Mike Simpson expressed vigorous opposition to President Obama’s proposal to raid the emergency fund created in 2008 in response the growing financial crisis. The President and Congressional Democrats are looking to redirect unspent and repaid Troubled Asset Relief Program (TARP) funds for a new federal stimulus bill and a bailout of states—something Simpson strongly opposes. Simpson is a cosponsor of H.R. 4110, the TARP Sunset Act of 2009, which would end the TARP program at the end of month.
“Republicans insisted that TARP include a number of taxpayer protections, including a requirement that any repaid funds be returned to the taxpayer to pay down the federal debt,” said Simpson. “Obviously those protections were necessary—now that companies are paying back the TARP payments they received and the taxpayer is making billions of dollars in interest, the Democrats are trying to turn the program from a one-time emergency measure to a permanent slush fund for growing government.”
According to a recent analysis by the Department of the Treasury, TARP is now projected to cost $200 billion less than previously projected. Over $70 billion in TARP funding has already been repaid by banks, and Bank of America is set to repay an additional $45 billion as early as this week. The federal government has already realized a $10 billion profit in interest paid on the repaid loans.
“TARP was never intended as a bailout,” said Simpson. “It was an investment in our financial system to ensure that our economy didn’t crash, allowing credit to be thawed and providing taxpayers with a long-term investment on which they would see a good return. I am deeply disappointed that the Obama Administration has instead used TARP funding as a bailout slush fund, and I am disgusted to see them trying to permanently redirect its unused and repaid funds into more government spending. Congress must stand firm on this issue: TARP has run its course, and the program needs to end now.
In addition to cosponsoring H.R. 4110, Simpson has signed onto two other efforts to ensure that unused money and repaid funds are used only to pay off the debt. In separate letters to Treasury Secretary Timothy Geithner and House Speaker Nancy Pelosi, Congressman Simpson and a number of his Republican colleagues are calling for the termination of TARP on December 31 and the return of all unused and repaid TARP funds to the Treasury for deficit reduction.
“As the December 31, 2009, deadline for the end of the Troubled Asset Relief Program (TARP) approaches, we urge you to adhere to this expiration date and decline to use your authority to extend TARP into 2010. As additional preferred shares are repurchased and dividends and interest are collected, we also urge you to dedicate all returned funds and other revenue to reducing the national debt,” wrote Congressman Simpson and his colleagues in their letter to Secretary Geithner.
“TARP has left a bad taste in the mouths of most Idahoans, including me, but it has served its purpose in stopping the hemorrhaging of our nation’s financial system in 2008 and lessened the blow of the recession we are currently facing. Having served its purpose it needs to end,” said Congressman Simpson. “The three actions I have undertaken will help bring the TARP era to a close, ensure taxpayers are fully repaid as the original TARP authorization required, and help block Democrats in their efforts to push through another ill-advised stimulus bill.”