Rep. Todd Tiahrt, R-Goddard, has introduced a bill in Congress to halt further spending to bail out financial institutions and automakers.
Tiahrt’s bill is called the “Ensure TARP Expires Act of 2009,” and would block Treasury Secretary Timothy Geithner from spending any more money on the Troubled Asset Relief Program, more commonly known as TARP.
Begun under the Bush Administration and continued by President Obama, TARP has injected hundreds of billions of dollars in capital into failing investment, banking, insurance and automotive companies in an effort to stabilize the financial system.
Supporters credit the program with staving off a worldwide depression by rescuing banks and other institutions that are “too big to fail” without causing dire economic consequences.
But the program’s popularity has plummeted in recent months amid reports that some large companies that received bailout funds have returned to giving lavish executive bonuses and perks now that they have returned to profitability.
“We must put an end to Secretary Geithner’s authority to funnel billions of bailout dollars to irresponsible institutions,” Tiahrt said in a statement announcing his current bill.
According to his office, Tiahrt has four co-sponsors for the measure so far: Mark Souder, R-Ind., Bob Inglis, R-S.C., Sam Johnson, R-Texas and Charles Boustany, Jr., R-La.
Rep. Jerry Moran, R-Hays, who is running against Tiahrt for the Senate seat being vacated by Kansas Sen. Sam Brownback, is also in support of putting an end to TARP, a spokeswoman for his office said.
In June, Moran introduced the Government Ownership Exit Plan Act of 2009.
It would prohibit the government from buying any more business assets under TARP. It would also require the treasury, by July 1 of next year, to sell off any government ownership stake — such as warrants or stock shares — that were acquired using TARP funds.
“Government interference with private sector affairs has long passed an expiration date,” Moran said in his statement announcing the legislation. “Throwing taxpayers’ borrowed dollars at private sector’s problems is never a solution – it only shifts the burden of risk.”
Of the initial $700 billion allocated to TARP, $200 million to $300 million remains unspent, according to government estimates.
The Obama Administration has acknowledged a reduced need for TARP assistance to businesses since the depths of the financial crisis in late 2008.
But the administration is considering extending the program past its original Dec. 31 end date and diverting some of the money toward paying down the national debt.
Tiahrt’s bill is the third time he’s asked Congress to fold TARP.
In March, he introduced a resolution against TARP and other bailout plans, which he said “are nothing more than a mere band-aid that continues to follow a pattern of throwing more taxpayer money at a problem instead of addressing the root causes.”
In May, he introduced a bill called the “Bailout Freedom Act” to allow financial institutions that received TARP funds to quickly pay the money back to the treasury and free themselves of the extra oversight that came with the government funding.