Flemington, NJ Tea Party

The website for the Flemington Tea Party (SM) group, Hunterdon County, New Jersey.

Thursday, July 2, 2009

Barney Frank Already Wants to Spend Profits from TARP

Remember how the clowns in Washington told us that the TARP program would actually "make money" for the American taxpayer? And that money would go back into the Treasury to reduce the debt?

Well, not if the Barney Frank the Banking Queen gets his way. Frank has proposed a spending bill called the "TARP for Main Street Act of 2009", which will take the profits from the TARP program and divert them to housing projects favored by the Democrats. But we should not really expect anything different from the unrecovered spendaholics running Washington.


The Washington Examiner

Barney Frank: Let's spend TARP profits before taxpayers can get them

By: BYRON YORK
Chief Political Correspondent
07/01/09 9:19 PM EDT


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.


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