TARP Becomes a Revolving Door Slush Fund

As part of the Wall Street bailout Congress passed last year, you may recall the optimistic talk about the potential profit taxpayers could get for their “investment.” But, as banks start to repay their TARP loans, it turns out that the U.S. Treasury is just turning the bailout into a sort of revolving door slush fund.

Some institutions have paid back their money as required – including Minnesota’s own TCF Bank, but instead of returning that money to the taxpayers to pay down the debt, Treasury Secretary Geithner wants to dole out the returned funds to more banks! Geithner announced just last week that funds will soon be made available to banks with less than $500 million in assets, and will allow those banks to apply for as much as 5 percent of risk-weighted assets, up from the previous 3 percent limit.

I’m cosponsoring legislation that will require that repaid bailout funds go directly to paying down the debt. And, it would require that TARP’s overall authorization to spend be reduced every time an institution pays the taxpayers back by the corresponding amount. All analyses now forecast trillion-dollar deficits as far as the eye can see. Congress needs to pay back the taxpayers who footed the bill for this misguided bailout. As an opponent of the Wall Street bailout I have to ask: How much longer will we continue this revolving line of credit to burden American taxpayers?