Posted on 07/03/2009 10:28:11 AM PDT by rabscuttle385
When President Obama announced on June 9 that some financial institutions would be allowed to repay Troubled Asset Relief Program dollars, he said the massively expensive TARP bailout had made money for the federal government. "It is worth noting that in the first round of repayments from these [TARP recipients], the government has actually turned a profit," the president said. Indeed, TARP supporters have long held out the hope that the program might be profitable.
But now Rep. Barney Frank, the chairman of the House Financial Services Committee, has come up with a proposal to spend any TARP profits before they can be returned to the taxpayers. Last Friday, Frank introduced the "TARP for Main Street Act of 2009," a bill that would take profits from the program and immediately redirect them toward housing proposals favored by Frank and some fellow Democrats.
In exchange for receiving TARP money, financial institutions were required to hand over shares of preferred stock that paid a dividend for the government. In theory, if a financial institution paid the dividend faithfully, and then repaid the TARP money, then the government would turn a profit. Last month, the General Accountability Office (GAO) reported that, through June 12, 2009, the government had received $6.2 billion in dividend payments. The original TARP legislation required that money made from the program "shall be paid into the general fund of the Treasury for reduction of the public debt."
Frank, however, wants to spend the money before it can be used to pay down anything. First, the "TARP for Main Street" proposal would take $1 billion "from dividends paid by financial institutions that have received financial assistance provided under…the Emergency Economic Stabilization Act" and apply it to a trust fund that Frank has long wanted to create for low-income rental housing. (The measure, unfunded, was part of last year's bailout of Fannie Mae and Freddie Mac.) Next, Frank would take $1.5 billion from TARP dividends for a so-called "neighborhood stabilization" fund. Republican critics have charged that both measures might allow federal dollars to be distributed to activist groups like the Association of Community Organizers for Reform Now, or ACORN.
The "TARP for Main Street" bill would also spend $2 billion, apparently from remaining TARP funds, to subsidize people who are delinquent on their mortgages, and another $2 billion to "stabilize multifamily properties that are in default or foreclosure."
Frank's proposal comes at a time when Republicans, and some Democrats, are expressing concern about the continued use of TARP money. Republican Sen. Orrin Hatch recently complained that TARP funds are "now being used as a go-to solution to address all of our nation's economic ills." Hatch and Democratic Sen. Blanche Lincoln recently introduced a bill that would require that TARP money goes back to the Treasury for debt reduction.
Spending the dividend payments now, as Frank proposes, would reduce the chance that TARP might ever be a break-even deal for the taxpayers. "We don't know if TARP is going to be making any money, so taking the dividend payments going back to Treasury is pretty questionable," says one House GOP aide. Indeed, in its June report, the GAO revealed that 17 troubled institutions have not paid their dividends, much less repaid the TARP money itself. And last week, the Wall Street Journal reported that three other institutions were not paying dividends. But now, Frank is proposing that dividends be spent immediately. "It defeats the idea of taxpayer protection," says the GOP aide.
This guy has to go.
fyi
Barney Lightintheloafers?
Another York article....This one on Barney
Thpend the money! Thpend the money!
America, when will you take a stand and tell these folks in D.C. that enough is enough. Stop the folly! We must take back American from these self serving rulers!!!!!
One of Grahamnesty's "secrets."
GO f yourself Barwney
Barney Bufu?
Why is this filth of the human race allowed to represent anything? When he needs committed too an Mental institution for the criminally insane.
And whom would this be; the people that are currently getting ALL of their bills paid (FREE CELL PHONES AS WELL) and sit on their a$$es and only drive their Caddie Escalade to the grocery store to buy $900 of lobster, steaks and booze?
Thanks. MORE good York reading.
Americans voted them in. Unfortunately.
I wonder if Barney knows who's jigging the numbers...
Barney Frank is America.
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