TARP Revisited and Redefined?
AP
In a speech given today at the Brookings Institute, President Obama outlined his new plan for job creation which will include the contraversial decision to tap into TARP funds to pay the tab. Before we get to the speech, take a look at the President. Did he have a rough night or what? Dude looked like he just peeled himself off of the fraternity house sofa and rolled into classroom to give a speech in his American government course. Maybe the burden of bankrupting America is finally catching up with this guy.
As to the speech, it was pretty much the cookie-cutter Obama economy address filled with the usual talking points – GW Bush and the Republicans created this mess and now they want to stand in my way while I try to fix it and the always appreciated “I’ve been reading letters from ‘normal folks’” remarks. The President did confirm speculations that he intends to use TARP (Troubled Asset Relief Program) funds to generate job growth. In what was quite a lengthy speech, I am not sure that I really grasped where he intends to spend said money or how he thinks it will create a single job, but it appears that is the plan at least. It seems that the administration would like to recast TARP as a “jobs bill” even though it has been denying for months that the rescue plan would have any direct impact on the creation of jobs. It is peculiar how as soon as the unemployment rate drops one fraction of a point, it is finally time to focus on jobs and to act as if this administration has been committed to creating them all along.
The idea of using TARP funds for this or any other purpose than was originally intended is sure to be a hot button issue in the days ahead on the Hill. As banks begin repaying this money (that everyone assumes came from nowhere like a bequest from a dead aunt that no one knew) the question of where the money is returned to will continue to loom large. When these morons passed that thing in the first place, they promised Americans not only that it would return to the Treasury and to the American people, but also that they would see a return on their “investment” as the banks repaid the loans. Well we all knew then, and we certainly know now, that the “return on their investment” part was a sham, but now it seems that the administration wants to double down with the money that has been repaid and spend it as they choose.
It is actually quite brilliant if you look at it from an outsider’s perspective – that is assuming you can see yourself as someone other than an American taxpayer flipping the bill for this thing. The administration and the brilliant men and women in Washington convince us that we must “rescue” and “bailout” the banking industry – and that they are going to pay us back and turn a profit. Then when that money comes back to Washington, they are the ones who get to choose where it finds a home. Essentially, if they get their greedy little way, they would find themselves as the proud new owners of $700 billion in taxpayer money to do with as they see fit without the public scorn that would surely follow actually spending that kind of money willy nilly.
In fairness, Congress will certainly play a role in monitoring this process and Republicans on the Hill will not go quietly as this money is “managed.” Oh wait, Republicans were not supposed to go quietly when they passed the thing in the first place. Woops. Guess we’re screwed.
You can read the transcript here.
In a major speech at the Brookings Institution, Mr. Obama said he also wants to extend fiscal stimulus programs that would provide unemployment insurance for out-of-work Americans and help laid-off workers keep their health insurance.
Additionally, the White House wants to provide additional $250 payments to senior and veterans and act on measures that could help local governments keep teachers and police officers employed.
Pointing to better-than-expected job market data last week, the president said the economy is on the right track. But more steps are needed to make sure that job growth matches up with economic growth, he said.
“Even though we have reduced the deluge of job losses to a relative trickle, we are not yet creating jobs at a pace to help all those families who have been swept up in the flood,” the president said. “There are more than seven million fewer Americans with jobs today than when this recession began. And it speaks to an urgent need to accelerate job growth in the short term while laying a new foundation for lasting economic growth.”
“Our biggest challenge now is making sure job growth matches up with economic growth,” Mr. Obama told reporters Monday.
The president might also step further into a debate over what to do with the $700 billion rescue fund approved in 2008 to stabilize the shaky financial system. The White House says it’s mulling ways to use the Troubled Asset Relief Program both for deficit reduction as well as new legislation to create jobs and revive lending for small businesses.
Republicans argue that reusing funds from the rescue fund is illegal. White House spokesman Robert Gibbs on Tuesday morning said there is “fairly strict law” as to how TARP can and can’t be used.
Still, the White House says there may be legal ways to tap into TARP to boost the weak labor market while also staying consistent with the original goals of the rescue. Other proposals that don’t fall in line with TARP’s objectives will be paid differently.
“TARP has turned out to be much cheaper than we had expected, although not cheap. It means that some of that money can be devoted to deficit reduction,” the president told reporters Monday after a meeting with Turkish Prime Minister Recep Tayyip Erdogan in the Oval Office. “And the question is, are there selective approaches that are consistent with the original goals of TARP? For example, making sure that small businesses are still getting lending that would be appropriate in accelerating job growth.”
What is wrong with spending TARP money on job creation. It is you republicans that keep complaining that TARP didnt do that. Now that he wants to redirect that money to what you wanted you are going to kill him for it? And if he looks tired it because of all the work that he has to do to clean up the mess left to him by George Bush
I cannot speak for all Republicans and certainly not those on Capitol HIll, but I didnt support any of these efforts and frankly I wouldn’t have supported a “jobs bill” either. I believe that the more the federal government tries to do the more it undoes in the private sector. In a perfect world, Id like to see all the TARP funds come back into the Treasury and then seal the vault and shut the door for the time being.