June 29, 2010

WASHINGTON - Financial Services Committee Ranking Member Spencer Bachus today released the following statement as Democrats passed an amendment to the Dodd-Frank conference report that would replace a $20 billion "lending tax" with a new accounting gimmick allocating accounted for TARP funds and increasing the FDIC reserve ratio to pay for new government programs. 

"What little credibility the Congressional Budget Office ever had as a non-partisan arbiter of Congressional action is now, once and for all, totally destroyed. 

"Chairman Barney Frank claims the CBO score used by Democrats will generate an estimated $11 billion in savings because TARP commitments in the last three months of the program would give rise to $11 billion of losses.  That is some ridiculous accounting.

"The previous CBO cost estimate for TARP was not the full $700 billion of the program, but was based on estimated taxpayer money that would be lost in the program if it wasn't paid back.  How would shutting down new programs two months early materially change that?  Did the Administration plan to purposefully make loans in the next two months that would lose billions of taxpayer dollars?

"The funds paid back in TARP are specifically required to reduce the deficit in order to protect the taxpayers' investment and exposure.  But the Democrats are rewriting the law to use TARP as their own personal slush fund to pay for new government programs. 

"Apparently creating new, potentially illegal accounting gimmicks to pay for their pet programs is the Democrats idea of financial reform.  It's a ridiculous scheme, and the American people are going to pay the price if this bill becomes law." 

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