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Refresher Course: TARP

October 27, 2010 - by Donny Shaw

The vote that best represents the general anger with Congress these days is passage of TARP, the taxpayer-backed bailout program that rescued the banks and car companies from bankruptcy, but did nothing to help the unemployed or foreclosed. Unfortunately, when asked, most people get the basic facts about TARP wrong. I’m not talking about the impacts of the policy or whether or not it was a good idea, just the basic, verifiable facts like who proposed it and who voted for it.

Given that this is still weighing on voters’ minds, and that it’s been more than two years since the actual vote, here’s a quick refresher.

1) TARP was proposed top-down by the Bush Administration and passed on a bipartisan basis by the Democratically-controlled 110th Congress. Remarkably, only 34% of people know that TARP was a Bush program, not an Obama program. It was submitted to Congress by then-Treasury Secretary Henry Paulson in mid-September 2008, approved by the Senate on October 1, 2008, and in the House a couple days later on October 3rd. The Democratic and Republican leadership in both chambers of Congress lobbied and whipped their members on passing the bill.

2) Although proposed by the Bush Administration, TARP was supported by Obama as a candidate and continued by the Obama Administration. Early in the Obama Administration, around the time the AIG bonus scandal broke, there was a sense that TARP may be terminated and that a new program for insolvent banks would be put in place. But, of course, that didn’t happen. In fact, Obama threatened to veto any attempt by Congress to restrict the dispersal of additional TARP funds.

3) TARP was bipartisan. More Democrats voted for it than Republicans in both chambers, but the level of bipartisanship in the TARP vote was pretty much unprecedented for such a controversial piece of legislation. In the House, 171 Democrats and 91 Republicans voted for it. In the Senate 40 Democrats, 33 Republicans and 1 Independent voted for it. See the full roll call details here — Senate and House.

4) In January 2009, at the beginning of the 111th Congress, The Senate voted in favor of releasing the second tranche of TARP money and the House voted against releasing it. Under the language of the law, both chambers would have had to vote against the second tranche for it to be blocked (though, even then the bill to block the funds would have been vetoed by Obama). In the Senate 6 Republicans joined 44 Democrats and 1 Independent in voting to release the second tranche of funds. In the House, the vote on blocking tranche two was passed by 270-155, with only 4 Republicans voting against the bill (i.e. in favor of releasing the additional money).

5) According to research from MapLight.org, senators and reps. voting in favor of TARP have received 47% more money from interest groups like commercial banks, securities companies and the Chamber of Commerce that supported the bill.

6) Companies that have received TARP money are giving generously to candidates they support in the current campaigns. According to a recent Washington Post report, “Among companies with PACs, the 23 that received $1 billion or more in federal money through the Troubled Assets Relief Program gave a total of $1.4 million to candidates in September, up from $466,000 the month before.” They’re giving the most to powerful Republicans who supported TARP and opposed financial reform.

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Comments

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allinacrook 10/30/2010 2:50am

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WhyWillItBe 10/29/2010 8:20am
in reply to jakj1 Oct 28, 2010 3:18am

That’s why our founders set the system up the way they did. By forcing an election every few years, and keeping the balance of powers in opposition to one another, they made sure that no one group would be able to push the agenda too far toward Totalitarianism in any direction. Remember the Declaration was a document stating the case for throwing of the choking reigns of a despot, and the Constitution was written to guard against ever having any person or group becoming despotic over the rest.

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beenblue 10/28/2010 9:31am

Words and Words, OH What do they mean!, redistribution of wealth : They took our money, and assets and redistributed to the top tiers of corporate america ( I think I`ll call it the trickle up theory. ) And how they howl if anyone has an idea of getting it back from their greedy hands, THAT`S UN-AMERICAN AND IT`S SOCIALISM!!! And it`s pretty much the same with government hand outs to the wealthy, that`s okay, after all their to big to fail, or the wealthy need more breaks so they can give us jobs washing their cars, and cleaning their homes, while they automate their factory`s so they don`t have to worry about benefits, and health care. Oh the american dream ! isn`t it amazing how it became a one way street.

TheDutchess 10/28/2010 5:29am
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I totally agree with you jakj1. Only 2 Republicans voted with the Democrats to pass legislation for the unemployment benefits. I agree with you that another group of liers and cheats are goin gto replace the ones we already have, but I’ll be damned if I would vote for any of those crazy extremist TParty nuts. If they have their way, they will get rid of unemployment insurance, medicaid, minimum wage, public schools, social security, any kind of government run program that they think is a handout. These partygoers want to return to the good old days when schools were segregated, women couldn’t vote and they could hang a person for looking the wrong way. We can’t let these extremists views infiltrate our government; we have enough problems to solve. They want to keep the money circulating only with the rich, not the poor. Wise Up People!! You only get this 1 chance to do the right thing!!!! Remember in November!!

jakj1 10/28/2010 3:18am
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Remember to vote the liers and cheats out on November 2nd. What is disapointing is that a new wave of liers and cheaters will be voted in. Nothing is going to change. The Republicans are already planning spending cuts, when you start cut spending, somewhere down the line it will create hardships on the American people and the big auto makers, banks, and the rich will keep rolling right along like nothing happend. Middle America and the poor will feel the full brunt and it will be like hitting the rich with a feather. Unemployment and foreclosers should be top priority right now and no one is doing anything about it. These two issues need to be addressed before this country dries up and blows away. Anyone unemployed should vote on November 2nd and vote the Senators out who did nothing to help them, and remember they took nice long vacations while you were trying to feed your children!!

beenblue 10/27/2010 6:14pm

It was of no surprise that the democrats followed the republicans in the TARP welfare to the banking industry, because they lack spine they followed Bush into the middle east in search of pay back, and gave us a war on terrorism with no expiration date within our life time, this is great for the banks, and the fed, but not so good for us. Can you smell the smoke of deception yet ??

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