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What to do with TARP Money?

Old 11-20-09, 09:01 AM
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What to do with TARP Money?

I didn't know which thread this fit under best so I figured I'd start a new one.

http://news.yahoo.com/s/politico/200...politico/29749

Congressional Democrats could be careening toward a head-on collision with the White House over $200 billion in leftover bailout money — money that Republicans think should simply be returned to taxpayers.

The Treasury Department is pushing for fiscal prudence and wants to use the money to pay down the deficit and keep a small rainy-day fund in case of economic catastrophe.

But Democrats are salivating over the possibility of $200 billion in unspent money.

House Democratic Caucus Chairman John Larson of Connecticut wants dough to fund job-creation legislation. Massachusetts Rep. Barney Frank, the powerful chairman of the House Financial Services Committee, wants to direct $2 billion of repaid Troubled Asset Relief Program funds to loans for unemployed homeowners so they can avoid foreclosure. House Speaker Nancy Pelosi of California admits that “there’s a good bit of interest” in spreading the money around to various economic projects.

And Senate Democrats want to put a big chunk — say, $40 billion — toward loans to small businesses.

Republicans, who regret ever voting for the $700 billion bailout in the first place, are moving in for the kill, convinced that a deficit-weary nation would thank them for pulling the plug on the great bank bailout of 2008.

“We don’t need it anymore, and the American people never liked it. Let’s just do away with it,” Rep. Michael Burgess (R-Texas) told Treasury Secretary Timothy Geithner during a hearing Thursday.

The White House realizes its goals clash with Democrats in Congress.

“As people on the Hill realize that there was money allocated and not spent, it becomes attractive. We need to find ways to make that less attractive,” said a senior administration official.

News reports in recent weeks and sources close to Treasury indicate that Geithner and his team are leaning toward extending the bailout fund beyond its Dec. 31 expiration date while putting some of the funds toward the deficit. But administration officials pushed back against those reports Thursday, stressing that no decisions have been made and that an announcement on the issue is far from imminent.

Geithner did some pushback himself, telling members of the Joint Economic Committee, “We are working to put TARP out of its misery, and no one will be happier than I am to see that program terminated.”

But under Burgess’s pummeling to just end the program, Geithner said that “this economy still faces tremendous financial challenges,” ticking off the continued problems in the housing market and small-business sector.

The conflicting messages coming from the administration highlight the perils of its position on this issue.

The White House has signaled that it wants to dedicate 2010 to deficit reduction, and putting the bulk of TARP funds into paying down the debt could please budget hawks on the Hill. But it also wants to keep an emergency fund just in case.

“The question is, what can you keep in your hip pocket for if the world collapses again?” said the senior administration official.

“They need it. We’re not out of the woods yet. ... [But] they’re struggling because the optics suck,” said an industry official familiar with the situation.

“They were leaning toward doing it, but now it gets even messier ... with Geithner’s latest troubles over AIG,” the official said, referring to a report by TARP’s watchdog this week that slammed Geithner’s handling of the American International Group bailout while heading up the New York Federal Reserve Bank.

But while administration officials are trying to see the big picture on the deficit, lawmakers see a chance to play the populist role.

“It was taxpayers who rescued Wall Street. Now it is time for Wall Street to contribute to the growth of Main Street,” Larson said this week.

Alaska Sen. Mark Begich, one of more than two dozen Senate Democrats who support directing some TARP dollars toward loans for small businesses, said “that’s where it should have gone.”

Begich said his constituents “saw the big banks walk away with these bailouts and then at the same time ended up with huge salaries,” while the small-business folks in his district wonder what happened to their help, he said.

Rep. Jan Schakowsky (D-Ill.) said Congress needs strong assurances that any future TARP money is going to be directed at Main Street, not big banks or credit card companies. “We need to insist on that, on a plan that ordinary people can relate to,” she told POLITICO.

Some Democrats are concerned that TARP’s image is so tarnished that no amount of refashioning the program as a lifeline for regular folks will help.

“If it were up to me, I would scrap TARP and all of the baggage that goes along with it, and I would do something specifically for the community banks, so we don’t depend on the bureaucracy and workings of the administration, etc., to make sure that it happens,” said New York Rep. Dan Maffei.

On Tuesday, Maffei was one of three Democrats on the House Financial Services Committee to vote in favor of a GOP amendment to force the sunset of TARP. Maffei said he’s concerned that voters back home just aren’t going to buy the notion that money used for unpopular bailouts of Wall Street firms and American automakers is suddenly going to help them.

“Branding matters,” said Maffei, a former Hill communications director. “Frankly, even if I believed that this would now be used for the smaller community banks, etc., I don’t believe my community banks would.”

Will Obama finally take the leadership role he says he will and start reducing the deficit?

The money was supposed to be for emergency use. Will Congress be willing to give up $200B in bribe money for votes

I like the administration's idea. Set aside some for an emergency fund (with strict rules on how it can be used), and give the rest back to China.
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Old 11-20-09, 09:05 AM
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Re: What to do with TARP Money?

"You don't let a crisis go to waste."
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Old 11-20-09, 10:31 AM
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Re: What to do with TARP Money?



We could have a party
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Old 11-20-09, 10:52 AM
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Re: What to do with TARP Money?

Originally Posted by from the article
Republicans, who regret ever voting for the $700 billion bailout in the first place, are moving in for the kill, convinced that a deficit-weary nation would thank them for pulling the plug on the great bank bailout of 2008.

“We don’t need it anymore, and the American people never liked it. Let’s just do away with it,” Rep. Michael Burgess (R-Texas) told Treasury Secretary Timothy Geithner during a hearing Thursday.
Typical. When "one of their own" pushed for the money they were all over it. Now that the opposition is in office, and they're facing re-election, they want to portray themselves as the responsible ones. The pitiful thing is, it will probably work.
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Old 11-20-09, 11:03 AM
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Re: What to do with TARP Money?

How can there be "unspent money" of any amount with the government over 9 trillion dollars in debt?

Oh wait, it is the government and congress we are talking about.
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Old 11-20-09, 11:26 AM
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Re: What to do with TARP Money?

Originally Posted by Brian Shannon View Post
How can there be "unspent money" of any amount with the government over 9 trillion dollars in debt?

Oh wait, it is the government and congress we are talking about.
The thought of Congress using the money to go towards paying off debt makes me . The Democrats are like college students and recent grads that get in really bad debt because they think if they charge something to a credit card and just make the minimum payments every month that they've never have to pay the initial purchases off. The most important questions of "how will we pay for this" and "how will we pay this off" are the ones that seem to have the least thought put into them.
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Old 11-20-09, 11:46 AM
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Re: What to do with TARP Money?

Originally Posted by sracer View Post
Typical. When "one of their own" pushed for the money they were all over it. Now that the opposition is in office, and they're facing re-election, they want to portray themselves as the responsible ones. The pitiful thing is, it will probably work.
Burgess was a "nay" vote on the first one, along with a slight majority of Republicans in the House:

http://clerk.house.gov/evs/2008/roll681.xml

OTOH, the "nay" votes in the Senate came from a total of 9 Dems, 14 Repubs, and an Independent:

http://www.senate.gov/legislative/LI...n=2&vote=00213

Last edited by DGibFen; 11-20-09 at 11:49 AM.
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Old 11-20-09, 01:17 PM
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Re: What to do with TARP Money?

Originally Posted by Senor Javi View Post
The thought of Congress using the money to go towards paying off debt makes me . The Democrats are like college students and recent grads that get in really bad debt because they think if they charge something to a credit card and just make the minimum payments every month that they've never have to pay the initial purchases off. The most important questions of "how will we pay for this" and "how will we pay this off" are the ones that seem to have the least thought put into them.
Yeah, that is exactly what I thought.
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Old 11-20-09, 03:53 PM
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Re: What to do with TARP Money?

Originally Posted by sracer View Post
Typical. When "one of their own" pushed for the money they were all over it. Now that the opposition is in office, and they're facing re-election, they want to portray themselves as the responsible ones. The pitiful thing is, it will probably work.
They weren't all over it. Remember the first time through it failed the house.

I don't argue with the fact that they are trying to portray themselves as responsible when they haven't acted that way at all
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Old 11-20-09, 09:25 PM
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Re: What to do with TARP Money?

I would spend some of the TARP money to buy a huge tarp to put over the money so they so not spend it on useless crap.
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Old 11-20-09, 11:36 PM
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Re: What to do with TARP Money?

It will be used for STIMULUS II
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Old 11-21-09, 07:00 PM
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Re: What to do with TARP Money?

Originally Posted by Tommy Ceez View Post
It will be used for STIMULUS II
So we're only counting 2008 and 2010 as actual stimulus packages?
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Old 11-23-09, 09:47 AM
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Re: What to do with TARP Money?

http://www.nytimes.com/2009/11/23/bu...ates.html?_r=1


...

Treasury officials now face a trifecta of headaches: a mountain of new debt, a balloon of short-term borrowings that come due in the months ahead, and interest rates that are sure to climb back to normal as soon as the Federal Reserve decides that the emergency has passed.

Even as Treasury officials are racing to lock in today’s low rates by exchanging short-term borrowings for long-term bonds, the government faces a payment shock similar to those that sent legions of overstretched homeowners into default on their mortgages.

With the national debt now topping $12 trillion, the White House estimates that the government’s tab for servicing the debt will exceed $700 billion a year in 2019, up from $202 billion this year, even if annual budget deficits shrink drastically. Other forecasters say the figure could be much higher.

In concrete terms, an additional $500 billion a year in interest expense would total more than the combined federal budgets this year for education, energy, homeland security and the wars in Iraq and Afghanistan.
...




It may be time to start getting serious about debt reduction instead of just giving it lip service.
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Old 11-23-09, 12:39 PM
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Re: What to do with TARP Money?

If they really want stimulate the economy they'll give the money to Acorn.
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Old 11-23-09, 12:40 PM
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Re: What to do with TARP Money?

Originally Posted by classicman2 View Post
If they really want stimulate the economy they'll give the money to Acorn.
Indeed. Free hookers for everyone would be quite stimulating.
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Old 12-03-09, 09:36 PM
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Re: What to do with TARP Money?

http://news.yahoo.com/s/ap/20091204/...democrats_jobs

WASHINGTON – Democrats are looking to tap as much as $70 billion in unused funds from the Wall Street bailout to pay for new spending on roads and bridges and to save the jobs of firefighters, teachers and other public employees, officials said Thursday.

After talks with the administration officials such as Treasury Secretary Timothy Geithner, Democratic lawmakers are eyeing what remains from last year's $700 billion financial rescue package as a way to finance job-related legislation. Two House Democratic aides said the figure could be as high as $70 billion.

The aides, who required anonymity to describe the private talks, discussed the dollar figure after House Speaker Nancy Pelosi, D-Calif., said money from the bailout should be used to pay for jobs legislation that would funnel billions of dollars to road, bridge and other infrastructure projects and also help struggling state and local governments retain public employees.

She also promised help for small businesses reeling from a credit crunch.

Pelosi didn't give a price tag on the initiative and said it would come on top of a costly "safety net" initiative that would again extend unemployment payments for those whose benefits have run out and renew a program that offers the jobless a 65 percent subsidy for health insurance premiums under the COBRA program.

....

We want to give more money to construction projects when we can't track the money we already gave in the stimulus?
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Old 12-03-09, 10:07 PM
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Re: What to do with TARP Money?

Since we've only spent 22% of the "stimulus" package, I'm hardly surprised that Democrats can't wait to get hold of $70 billion more...


There's votes they have to buy. Start The Presses!
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Old 12-03-09, 10:27 PM
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Re: What to do with TARP Money?

Would the money ($50 billion) Bank of America is giving back be part of that $70 billlion?
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Old 12-03-09, 10:31 PM
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Re: What to do with TARP Money?

in the article...

About $210 billion of Troubled Assets Relief Program money remains uncommitted or has been paid back; Bank of America Corp. also announced Wednesday that it would repay its $45 billion in government bailout money.

...

Using bailout authority for a jobs initiative would add billions to the $12.1 trillion national debt. Under the law, repaid TARP funds must be used to reduce the debt and any TARP money that isn't needed simply is never borrowed. Democrats want to use the authority to borrow about another $70 billion to pay for the jobs program.
not sure what authority that is refering to
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Old 12-03-09, 11:20 PM
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Re: What to do with TARP Money?

Originally Posted by Brian Shannon View Post
How can there be "unspent money" of any amount with the government over 9 trillion dollars in debt?

Oh wait, it is the government and congress we are talking about.
The last time we had a surplus it was used on a middle class tax break. Good move.

This time, it should be used to pay down the huge deficit. Don't underestimate what the government will do with extra money. They're only irresponsible with money that we're borrowing.
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Old 12-03-09, 11:45 PM
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Re: What to do with TARP Money?

How's the money we gave to Chrysler doing? They won't be a company in a year. All the buyers are pulling out, and that is probably good for them. Seemed like a real stupid move by Fiat, etc.
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Old 12-04-09, 02:03 AM
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Re: What to do with TARP Money?

That was just to stave off the worst of it. It's going to be worse off in the future though, with more layoffs, plant closings, dealerships closing down, and enormous debt to boot.

Ah, sometimes, just sometimes, it takes your mind off your troubles when you realize just how much trouble the country is in.

Last edited by Superboy; 12-04-09 at 05:51 AM.
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Old 12-04-09, 12:01 PM
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Re: What to do with TARP Money?

Originally Posted by Superboy View Post
That was just to stave off the worst of it. It's going to be worse off in the future though, with more layoffs, plant closings, dealerships closing down, and enormous debt to boot.

Ah, sometimes, just sometimes, it takes your mind off your troubles when you realize just how much trouble the country is in.
yep, we could have let that happen for nothing, but we paid billions to watch it.
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Old 12-07-09, 09:20 AM
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Re: What to do with TARP Money?

http://news.yahoo.com/s/ap/20091207/..._bailout_costs

Treasury Secretary Timothy Geithner indicated Friday that the administration was considering supporting not only increased job creation with the TARP funds but also helping to reduce future budget deficits.
Someone want to explain to me how you reduce future budget deficits by borrowing money? Or is Geithner saying that not spending the money will reduce deficits?
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Old 12-07-09, 09:51 AM
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Re: What to do with TARP Money?

Can I have some? My credit card bills are starting to creep up again.
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