Senator John ThuneThe federal government does not enjoy a strong track record when it comes to financial management. However, that has not stopped both the current and previous Administrations from taking unprecedented steps to intervene in private businesses. This trend not only undermines fair competition in the market, but creates an atmosphere where elected officials and government bureaucrats can coerce once-private businesses for political purposes.
Economic competition is like sports, with teams competing against each other using agreed upon rules. The government should act as the referee, ensuring that the rules are followed and enforcing penalties when they are not. However, if the government takes an ownership stake in a company, it can no longer be expected to enforce the rules fairly, because simultaneously being a "player" in the game compromises the whole system.
Last year, Congress gave the Treasury Department the authority to temporarily purchase "toxic assets" from banks and financial institutions in an attempt to protect the free flow of credit in the economy. Unfortunately, the Treasury Department defied Congress's intent and has used the money to purchase ownership stakes in banks, financial institutions, and even General Motors and Chrysler - entities that Congress never envisioned receiving funding. Even worse, the Treasury Secretary testified before Congress that he has no plan to wind-down the government's ownership stake.
On June 11, 2009, I introduced the Government Ownership Exit Plan Act, legislation that would prohibit the Treasury Department from purchasing additional ownership interests in private companies. My bill would also require the Treasury Department to sell off any ownership interests in private companies by July 1, 2010 - with the ability to extend this deadline to July 2011 if needed. Additionally, any revenue from the sale of these assets would be used to pay down our dangerously high national debt.
If our nation continues down this dangerous path, the president will be the de facto CEO of more and more segments of the economy, with Congress behaving like a 535-member board of directors. Every business decision will be viewed through an added political lens, putting even more taxpayer money in jeopardy.
Even in difficult times, our free market economy built on fair competition is the envy of the world. Increased government intervention through the purchase of private businesses seriously jeopardizes the integrity of our nation's economy. The Government Ownership Exit Plan Act would put the brakes on runaway government intervention and would establish a strategy to eliminate government ownership in private companies. I already have the support of a number of my Senate colleagues and I will continue to urge others to support this common sense effort.