Washington, D.C. —
Senator John Thune today led a group of his Senate colleagues in sending a letter to U.S. Treasury Secretary Timothy Geithner urging him to allow the Troubled Asset Relief Program (TARP) to expire on December 31, 2009. Last year's Emergency Economic Stabilization Act allows the Treasury Department to extend TARP authority through October 3, 2010, but Senator Thune and 38 of his colleagues are asking Secretary Geithner to refrain from extending TARP.
"The Troubled Asset Relief Program was originally designed and proposed to Congress as a measure to help failing banks get toxic assets off their books while they regained financial stability," said Thune. "In reality, TARP has been used to take ownership interests in banks, insurance companies, and automakers.
"These actions are not in line with what Congress intended in creating the program when further financial decline looked possible. In addition to the fact that a significant amount of the $700 billion provided for under TARP has gone unused, the Congressional Oversight Panel recently noted that the American taxpayer is expected to lose tens of billions of dollars in funding that was provided to GM and Chrysler - not to mention the untold billions of dollars in TARP funding that is not expected to be recouped from AIG. For these reasons, I do not believe that the Treasury Department should seek to extend TARP."
Similarly, Senator Thune has proposed the Government Ownership Exit Plan, which would establish a timeline for the federal government to end its ownership of all private entities acquired through TARP. The plan also prohibits the future acquisition of new or additional ownership interests in private firms with TARP funds and prohibits the federal government from making management decisions in private companies in which it has an ownership interest. Additionally, this legislation prevents Treasury from recycling returned TARP dollars.
Senator Thune is joined in sending the letter by Senators Lamar Alexander (R-TN), John Barrasso (R-WY), Bob Bennett (R-UT), Kit Bond (R-MO), Sam Brownback (R-KS), Jim Bunning (R-KY), Richard Burr (R-NC), Saxby Chambliss (R-GA), Tom Coburn (R-OK), Thad Cochran (R-MS), Susan Collins (R-ME), Bob Corker (R-TN), John Cornyn (R-TX), Mike Crapo (R-ID), Jim DeMint (R-SC), John Ensign (R-NV), Mike Enzi (R-WY), Lindsey Graham (R-SC), Charles Grassley (R-IA), Orrin Hatch (R-UT), Kay Bailey Hutchison (R-TX), Jim Inhofe (R-OK), Johnny Isakson (R-GA), Mike Johanns (R-NE), Jon Kyl (R-AZ), George LeMieux (R-FL), Dick Lugar (R-IN), John McCain (R-AZ), Mitch McConnell (R-KY), Lisa Murkowski (R-AK), Jim Risch (R-ID), Pat Roberts (R-KS), Jeff Sessions (R-AL), Richard Shelby (R-AL), Olympia Snowe (R-ME), David Vitter (R-LA), George Voinovich (R-OH), and Roger Wicker (R-MS).
The full text of the letter follows:
September 18, 2009
The Honorable Timothy Geithner
Secretary
United States Department of Treasury
1500 Pennsylvania Avenue NW
Washington, DC 20220
Dear Secretary Geithner:
As we approach the termination date for authority to spend federal funds allocated to the Troubled Asset Relief Program (TARP) through the Emergency Economic Stabilization Act of 2008 (EESA) (PL 110-343), we ask you to allow the authority to expire on December 31, 2009. As you know, the latest TARP report shows a significant amount of unobligated funds. Ending the authority for TARP would help improve the Federal debt going forward and reduce the need to increase the debt limit, which Congress has raised three times in the last 14 months.
When Congress passed EESA last October, the financial markets were in a downward spiral, and our country was facing an unprecedented credit crisis. Then Treasury Secretary Paulson requested $700 billion in federal funds to purchase toxic assets, which were at the heart of the financial crisis. Congress was told it was imperative to act quickly before the financial markets crashed, taking with it the pensions, savings and investments of hardworking, American taxpayers. As you know, the Senate passed EESA on a bipartisan basis, including the support of then-Senator Obama. Subsequent to the enactment of this legislation, however, 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.
Based on your comments to the TARP Congressional Oversight Panel on September 10, 2009, it appears that you believe that our financial markets are recovering. In addition, borrowing costs are down for both business and consumer lending and banks are reporting stronger balance sheets. While we understand that our economy is still recovering, we believe it can function without added TARP funding. Additionally, the cost to the taxpayer if TARP authority was extended could be substantial. Already the taxpayer is expected to lose tens of billions of dollars on funding that was provided to GM, Chrysler and AIG.
As elected officials with the responsibility to the American public when it comes to overseeing taxpayer interests, we urge you not to extend TARP. To the extent you have concerns that allowing TARP to expire after this year would jeopardize the progress made in the recovery of our financial markets, we would remind you that Congress stands ready to work alongside the Administration if future action is required. This program should expire on December 31, 2009, and all TARP repayments should be returned to the Treasury for debt reduction.
Sincerely,
Senator John Thune
Senator Lamar Alexander
Senator John Barrasso
Senator Bob Bennett
Senator Kit Bond
Senator Sam Brownback
Senator Jim Bunning
Senator Richard Burr
Senator Saxby Chambliss
Senator Tom Coburn
Senator Thad Cochran
Senator Susan Collins
Senator Bob Corker
Senator John Cornyn
Senator Mike Crapo
Senator Jim DeMint
Senator John Ensign
Senator Mike Enzi
Senator Lindsey Graham
Senator Charles Grassley
Senator Orrin Hatch
Senator Kay Bailey Hutchison
Senator Jim Inhofe
Senator Johnny Isakson
Senator Mike Johanns
Senator Jon Kyl
Senator George LeMieux
Senator Dick Lugar
Senator John McCain
Senator Mitch McConnell
Senator Lisa Murkowski
Senator Jim Risch
Senator Pat Roberts
Senator Jeff Sessions
Senator Richard Shelby
Senator Olympia Snowe
Senator David Vitter
Senator George Voinovich
Senator Roger Wicker
"The Troubled Asset Relief Program was originally designed and proposed to Congress as a measure to help failing banks get toxic assets off their books while they regained financial stability," said Thune. "In reality, TARP has been used to take ownership interests in banks, insurance companies, and automakers.
"These actions are not in line with what Congress intended in creating the program when further financial decline looked possible. In addition to the fact that a significant amount of the $700 billion provided for under TARP has gone unused, the Congressional Oversight Panel recently noted that the American taxpayer is expected to lose tens of billions of dollars in funding that was provided to GM and Chrysler - not to mention the untold billions of dollars in TARP funding that is not expected to be recouped from AIG. For these reasons, I do not believe that the Treasury Department should seek to extend TARP."
Similarly, Senator Thune has proposed the Government Ownership Exit Plan, which would establish a timeline for the federal government to end its ownership of all private entities acquired through TARP. The plan also prohibits the future acquisition of new or additional ownership interests in private firms with TARP funds and prohibits the federal government from making management decisions in private companies in which it has an ownership interest. Additionally, this legislation prevents Treasury from recycling returned TARP dollars.
Senator Thune is joined in sending the letter by Senators Lamar Alexander (R-TN), John Barrasso (R-WY), Bob Bennett (R-UT), Kit Bond (R-MO), Sam Brownback (R-KS), Jim Bunning (R-KY), Richard Burr (R-NC), Saxby Chambliss (R-GA), Tom Coburn (R-OK), Thad Cochran (R-MS), Susan Collins (R-ME), Bob Corker (R-TN), John Cornyn (R-TX), Mike Crapo (R-ID), Jim DeMint (R-SC), John Ensign (R-NV), Mike Enzi (R-WY), Lindsey Graham (R-SC), Charles Grassley (R-IA), Orrin Hatch (R-UT), Kay Bailey Hutchison (R-TX), Jim Inhofe (R-OK), Johnny Isakson (R-GA), Mike Johanns (R-NE), Jon Kyl (R-AZ), George LeMieux (R-FL), Dick Lugar (R-IN), John McCain (R-AZ), Mitch McConnell (R-KY), Lisa Murkowski (R-AK), Jim Risch (R-ID), Pat Roberts (R-KS), Jeff Sessions (R-AL), Richard Shelby (R-AL), Olympia Snowe (R-ME), David Vitter (R-LA), George Voinovich (R-OH), and Roger Wicker (R-MS).
The full text of the letter follows:
September 18, 2009
The Honorable Timothy Geithner
Secretary
United States Department of Treasury
1500 Pennsylvania Avenue NW
Washington, DC 20220
Dear Secretary Geithner:
As we approach the termination date for authority to spend federal funds allocated to the Troubled Asset Relief Program (TARP) through the Emergency Economic Stabilization Act of 2008 (EESA) (PL 110-343), we ask you to allow the authority to expire on December 31, 2009. As you know, the latest TARP report shows a significant amount of unobligated funds. Ending the authority for TARP would help improve the Federal debt going forward and reduce the need to increase the debt limit, which Congress has raised three times in the last 14 months.
When Congress passed EESA last October, the financial markets were in a downward spiral, and our country was facing an unprecedented credit crisis. Then Treasury Secretary Paulson requested $700 billion in federal funds to purchase toxic assets, which were at the heart of the financial crisis. Congress was told it was imperative to act quickly before the financial markets crashed, taking with it the pensions, savings and investments of hardworking, American taxpayers. As you know, the Senate passed EESA on a bipartisan basis, including the support of then-Senator Obama. Subsequent to the enactment of this legislation, however, 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.
Based on your comments to the TARP Congressional Oversight Panel on September 10, 2009, it appears that you believe that our financial markets are recovering. In addition, borrowing costs are down for both business and consumer lending and banks are reporting stronger balance sheets. While we understand that our economy is still recovering, we believe it can function without added TARP funding. Additionally, the cost to the taxpayer if TARP authority was extended could be substantial. Already the taxpayer is expected to lose tens of billions of dollars on funding that was provided to GM, Chrysler and AIG.
As elected officials with the responsibility to the American public when it comes to overseeing taxpayer interests, we urge you not to extend TARP. To the extent you have concerns that allowing TARP to expire after this year would jeopardize the progress made in the recovery of our financial markets, we would remind you that Congress stands ready to work alongside the Administration if future action is required. This program should expire on December 31, 2009, and all TARP repayments should be returned to the Treasury for debt reduction.
Sincerely,
Senator John Thune
Senator Lamar Alexander
Senator John Barrasso
Senator Bob Bennett
Senator Kit Bond
Senator Sam Brownback
Senator Jim Bunning
Senator Richard Burr
Senator Saxby Chambliss
Senator Tom Coburn
Senator Thad Cochran
Senator Susan Collins
Senator Bob Corker
Senator John Cornyn
Senator Mike Crapo
Senator Jim DeMint
Senator John Ensign
Senator Mike Enzi
Senator Lindsey Graham
Senator Charles Grassley
Senator Orrin Hatch
Senator Kay Bailey Hutchison
Senator Jim Inhofe
Senator Johnny Isakson
Senator Mike Johanns
Senator Jon Kyl
Senator George LeMieux
Senator Dick Lugar
Senator John McCain
Senator Mitch McConnell
Senator Lisa Murkowski
Senator Jim Risch
Senator Pat Roberts
Senator Jeff Sessions
Senator Richard Shelby
Senator Olympia Snowe
Senator David Vitter
Senator George Voinovich
Senator Roger Wicker
