Follow the bouncing ball: TARP, the trillion-dollar-plus banking bailout, has morphed from a toxic assets purchase plan to a capital injection plan, back to a toxic assets purchase plan, to a life insurance company bailout, to an auto supplier bailout. I’m sure I forgot more.
Well, now the Democrats want to use it to bail out state governments and convert unused TARP bucks into…a government union slush fund.
Oh, Christmas tree, Oh, Christmas tree…
U.S. House Speaker Nancy Pelosi (D., Calif.) said Thursday that unused money in the Treasury Department’s financial rescue plan would be used to pay for a new job-creation package.
Pelosi said she favored using funds in the Troubled Asset Relief Program to finance initiatives aimed at kick-starting growth in the moribund jobs market.
In doing so, she effectively ruled out implementing a tax on financial transactions by banks and other financial institutions.
Pelosi said she still favored a tax in principle but the U.S. would have to work with other countries to implement such a levy.
So far, financial institutions have repaid around $71 billion of taxpayer money to the Treasury. That figure doesn’t include the $45 billion that Bank of America Corp. (BAC) said Wednesday it intends to repay.
Additionally, there is approximately $226.5 billion of the original $700 billion fund that either was never used by the Treasury or was earmarked for initiatives but not yet spent.
A senior aide to Pelosi said no decisions had been made as to which pot of money to use, or how big the final job-creation package would be.
He said House Democrats are talking to their counterparts in the Senate as well as in the Obama administration.
White House Press Secretary Robert Gibbs said Thursday the administration is “actively looking at” ways to use the TARP program to help aid the labor market.
… Pelosi said serious thought is being given to investments in transportation infrastructure, seen by economists as one of the most efficient ways of creating jobs quickly.
She also said money could be used to preserve public-sector jobs such as firefighters, police and health-care providers.
The senior Pelosi aide said this would be distributed by bypassing state governments and providing funds directly to local or regional governments.
It’s the “inevitable lard-up” phenomenon I’ve been writing about since bailout-a-palooza began under the Bush administration.
Let’s hope the Republicans learn from experience and resist the apocalpytic Chicken Little impulses to sign on to another disaster like this again.
No, let’s not merely hope. Let’s make sure we have GOP leaders in place with the brains and spine to stop this from happening again.
After Thursday’s job summit, the White House is considering using leftover funds from the financial bailout to help boost job creation. Rep. Paul Ryan (R., Wis.), the ranking member of the House Budget Committee, tells NRO that such a plan would be foolhardy. “President Obama is trying to apply ‘Cash for Clunkers’ to the entire American economy,” he says.
Such a policy would “just be cosmetic and political marketing,” says Ryan. “Economic actors see through the spin. There’s no need to deploy this kind of capital. If people can borrow, they are doing it. Instead of ladling T.A.R.P. funds, the president should be trying to lower taxes.” The administration, he says, is “desperately trying to pull future economic growth into the present.”
Reminder of GOP Rep. Paul Ryan’s emotional Chicken Little appeal for TARP on the House floor: “Doing nothing is the worst thing we could do!”
No, no it isn’t.