Refresher Course: TARPOctober 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.