One of the interesting things about Washington is the way it always seems to take one step forward then two steps back. One recent example would be when the White House announced that it expected the bailout known as the Troubled Asset Relief Program (or TARP) to cost $200 billion less than originally projected. With our federal budget looking to run a $1.5 trillion deficit this year, I was happy to hear about these savings.
But then the president turned around and announced he wanted to use most of that money to help pay for $150 billion in new stimulus spending programs. Rather than looking for new places to use taxpayer dollars, it is time for Washington to stop its spend-now, ask-questions-later attitude and put our country back on the road to fiscal responsibility and government restraint.
With millions of Americans out of work, the single best thing Washington can do is to get the economy moving again and create an environment for private industry to create jobs. But one of the biggest impediments to that happening is the out-of-control growth of government and the uncertainty it creates among families, businesses and investors.
When the federal government started buying up businesses through TARP and picking winners and losers in the marketplace, it sent a dangerous signal to banks that the Treasury would stand behind reckless behavior. And at the same time it put taxpayers on the hook for hundreds of billions of dollars.
Now TARP funds may become just another slush fund for Democrats to spend on pet projects that might be good for them politically, but do nothing for our national economy. Far from spending our way out of this recession, this flawed approach would just dig us into a deeper hole.
Take the president’s last $800 billion stimulus package as an example. He billed that as a guaranteed way to create up to 4 million jobs. Since that stimulus was passed last February, our economy has lost 2.7 million jobs, and unemployment has risen to 10 percent.
Even if more government spending were a good solution to the specific problems we are facing, it is questionable whether we need another budget-busting stimulus as the president has proposed, and even less clear that we should, or can, use TARP funds for the job. Especially when you consider that the government still has not spent all of the last stimulus. If spending now on these new programs is so essential, why not use the hundreds of billions of unspent stimulus funds to cover them?
TARP has already strayed far from its original purpose of taking toxic assets off the books of financial institutions so they could get back on their feet. My Republican colleagues and I predicted last year that if it wasn’t shut down, it would continue to be used improperly and would morph into a slush fund for the administration’s or Congress’ favorite projects of the day.
This was exactly our concern when we wrote to Treasury Secretary Geithner last September to urge him to allow TARP to expire at the end of 2009. And it was still our concern in November when I proposed legislation to force the administration to end the program, because we knew it would be too great a temptation to have that money sitting around. Unfortunately, we have been proven correct.
So we will try again. This week Senate Democrats will vote to again expand the nation’s debt limit by at least $635 billion $1.9 trillion, and I have introduced an amendment that would end TARP immediately and lower the debt limit by an amount equal to whatever funds we get back from the program. Taking steps now to reduce the uncertainty created by a ballooning national debt will have a far greater impact on righting our economy and allowing private businesses to create jobs than will any new spending by the government.
TARP was never meant to be the president’s piggy bank for costly new stimulus spending, and the wisest thing we could do with the remaining TARP money is to end the program so these funds won’t be wasted. I hope Senate Democrats will take this opportunity to join their Republican colleagues in supporting my amendment to finally end the TARP experiment. In doing so, we can take one small—but significant—step on the path toward fiscal responsibility.
Sen. John Thune is a Republican U.S. Senator from South Dakota.