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TARP: It Couldn't End Thune Enough

Posted By James Gattuso On November 18, 2009 @ 2:33 pm In Economics | Comments Disabled

In an era when legislation routinely exceeds 1,000 pages, the bill introduced by Sen. John Thune yesterday — at seven lines — doesn’t look like much. But looks can be deceptive. If adopted, those seven lines would guarantee the end of the Troubled Asset Relief Program (TARP), a critical first step toward putting federal finances, and the economy, back on the right track.

Under current law, TARP, which provided up to $700 billion to support troubled financial institutions, is scheduled to expire on December 31 of this year, but can be extended until October of next year if Treasury Secretary Tim Geithner call for an extension. Geithner hasn’t made any final decision yet, but all indications are that he will so request. The Thune bill, S. 2787, would take away this authority, ensuring that the program will end this year.

The Administration has argued that more time would be useful, giving them the flexibility to extend taxpayer support to troubled financial institutions (and auto manufacturers) if necessary. That’s not good enough. The economic crisis that led to the adoption of TARP is over. Rather than a necessary tool to avoid an systemic collapse of the financial system, TARP has become at best just another source of stimulus spending, and at worst a slush [1] fund [2] providing ready [3] cash [4], with little or no accountability [5], to whatever industry [6] or [7] firm [8] the Treasury Department
chooses [9] to support [10].

It should be ended [11].

Article printed from The Foundry: Conservative Policy News from The Heritage Foundation: http://blog.heritage.org

URL to article: http://blog.heritage.org/2009/11/18/tarp-should-end-thune/

URLs in this post:

[1] slush: http://www.heritage.org/research/economy/upload/wm_2170.pdf

[2] fund: http://www.foundry.org/2009/10/21/the-never-ending-tarp-slush-fund/

[3] ready: http://foundry.heritage.org/2009/11/12/lock-in-the-deficit-savings-end-tarp-entirely/

[4] cash: http://www.heritage.org/Research/economy/wm2618.cfm

[5] accountability: http://foundry.heritage.org/2009/11/16/whos-watching-fannie-and-freddie-oversight-agency-fires-its-ig/

[6] industry: http://foundry.heritage.org/2009/10/07/exit-strategy-or-entrance-strategy-new-tarp-program-on-the-way/

[7] or: http://foundry.heritage.org/2009/11/05/tarp-enables-big-labor-crony-capitalism-again/

[8] firm: http://foundry.heritage.org/2009/10/28/obamas-tarp-bailouts-fueling-ponzi-economy/

[9] chooses: http://foundry.heritage.org/2009/11/17/aig-did-geithner-give-away-the-farm/

[10] support: http://foundry.heritage.org/2009/11/03/cit-bankruptcy-shows-that-it-is-time-to-end-tarp/

[11] It should be ended: http://www.heritage.org/research/economy/upload/wm_2174.pdf

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