- The Washington Times - Tuesday, June 23, 2009

A bipartisan trio of senators say they will introduce legislation to make sure that Wall Street bailout money repaid to the federal government cannot be recycled to keep the program perpetual.

The measure would require any Troubled Asset Relief Program (TARP) funds returned to the Treasury Department to go into the federal government’s general fund to pay down the nation’s debt.

Current law is unclear on whether returned funds could be recycled into TARP and used to make new taxpayer-funded investments in the private sector, say the measure’s sponsors - Republican Sens. Orrin G. Hatch of Utah and Bob Corker of Tennessee, and moderate Democratic Sen. Blanche Lincoln of Arkansas.

“TARP was never meant to be a permanent program, but rather an emergency initiative designed to stabilize our financial markets and bring greater confidence to investors and business,” Mrs. Lincoln said. “It is only appropriate for that program to be phased out as expeditiously as possible.”

The senators on Monday said they will include the measure as an amendment to a tourism bill scheduled for debate this week on the Senate floor.

When TARP was signed into law last fall, it was authorized to purchase up to $700 billion in toxic or troubled assets from financial institutions in order to restore liquidity to the frozen credit markets. Many conservatives in Congress have complained that the money has since been diverted to other programs, including direct stock purchases in banks and loans to help troubled domestic automakers.

“TARP has become a revolving fund for the Treasury to nationalize our nation’s private sector by using taxpayer money to acquire banks, insurance companies and auto manufacturers,” Mr. Hatch said. “This money belongs to the American people.”

The Treasury Department recently approved spending $30 billion in TARP funds to acquire 60 percent of General Motors’ shares. Under the current system, if the Treasury sold these shares at a profit, the $30 billion could revert back to TARP, and only the profit would be put in the general fund.

Under the senators’ amendment, the original investment also would have to be placed in the general fund to pay down the nation’s debt.

More than $70 billion has been returned to the fund in recent months, including $68 billion borrowed by 10 of the nation’s largest banks.

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