Gregg: TARP Is No Slush Fund
The trouble facing Democrats hoping to use repaid bailout money to fund other things is this: The Troubled Asset Relief Program stipulates that all such funds be used to pay down the nation’s staggering debt.
That little inconvenience hasn’t dissuaded the Obama administration from proposing a $30 billion small-business loan program using repaid TARP cash. But it does set the White House up for a good deal of criticism from budget hawks. On cue, Sen. Judd Gregg (N.H.), senior Republican on the Budget Committee, issued a statement today reminding Democrats that “TARP is not a piggybank.”
Under the TARP law, repaid TARP funds must be used to reduce the debt — and given that we will have a $1.6 trillion deficit this year and the Senate just voted to increase the debt limit to more than $14 trillion, the requirements of the TARP law should not be changed…
TARP dollars should not be used as a slush fund for the President’s other priorities. The TARP program should end immediately, and, as the TARP law requires, all repaid funds should be used to reduce our staggering debt burden, not used in a way that will add to it.
Gregg would know. He authored the TARP provision requiring any returned funds to go toward debt reduction.