- James I. Clark III
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How Do You Solve a Problem Like TARP?
The Obama Administration is giving serious thought to the best use of the remaining funds that are part of the Troubled Asset Relief Program (TARP) financial bailout. The President – under pressure to bring down the deficit that has grown as the government seeks to reverse the economic crisis — is considering using a significant amount of the leftover funds to reduce the national debt.
Approximately $139 billion of the $700 billion financial bailout program passed last year remains unspent and available to the Treasury Department. Financial institutions have returned approximately $71 billion in TARP funds to the government and paid an additional $10 billion in interest and dividends to the Treasury Department. The struggling economy and high unemployment rates are the impetus for paying down nearly $200 billion of the $12 trillion national debt.
Some Democrats in Congress think that unspent TARP funds should be used as an antidote to rising unemployment. According to Representative John B. Larson (D-CT), chairman of the House Democratic Caucus, lawmakers could send a strong message about their priorities by using TARP funds to pay for road and bridge projects and other efforts that will create jobs. “We want to look at how Wall Street can refund Main Street,” Larson said, noting that he and other senior House Democrats are considering a tax on financial transactions. One possible use of unspent TARP funds could be payouts to small business programs to jump start job growth.