Bid to end Troubled Asset Relief Program payments fails in Senate

WASHINGTON -- The Senate voted last week against an attempt to close the books on the $700 billion financial bailout fund. The vote on the Troubled Asset Relief Program, or TARP, came during debate on a bill to allow the government to borrow another $1.9 trillion to meet its obligations.

Sen. John Thune, R-S.D., proposed to shut down the TARP fund, which was created in 2008 to stabilize troubled financial institutions and head off economic collapse. He said TARP "has served its purpose."

Of the $700 billion originally authorized, $320 billion has either not been spent by the government, or has been spent and paid back by finance corporations that have recovered.

Thune argued that money should be put back into the Treasury to reduce the deficit. If not, he said, Congress will spend it on other things.

Ending TARP "is a very straightforward way in which we can signal to the American people that we are serious about fiscal responsibility," he said.

Arguing against the amendment, Sen. Christopher Dodd, D-Conn., said the recovery is ongoing and TARP funds still are needed. The House in December voted to use TARP money to help pay for a $150 billion jobs bill.

Dodd said the Obama administration now is considering using TARP to:

• Assist community banks "to get credit flowing."

• For small businesses.

• For mortgage companies to mitigate foreclosures.

Thune's amendment was killed 53-45, seven short of the 60 that he needed to move it forward. Thirteen Democrats joined 40 Republicans in voting for the amendment. Forty-three Democrats and the two independent senators voted against it.

Sen. John Ensign, R-Nev., voted to end the TARP fund. Sen. Harry Reid, D-Nev., voted against ending the fund.

The Senate continued debate into the new week on the underlying bill, which would raise the limit on government borrowing to $14.294 trillion, an increase of $1.9 trillion from the current level.

Contact Stephens Washington Bureau Chief Steve Tetreault at stetreault @reviewjournal.com or 202-783-1760.