Michael F.Bennet

United States Senator for Colorado

Reining in the Debt and Ending the Bailout

The Senate recently passed my Pay It Back amendment with broad bi-partisan support. This plan will cut the size of the bailout and severely restrict the ‘revolving door' bailout fund.

Pay It Back reduces the size of the bailout fund known as TARP by $150 billion and prevents Treasury from redirecting unused funds for new programs. It will also ensure that repaid banking, housing and auto bailout funds - totaling more than $180 billion to date - are used to pay down the deficit, not to fund further spending. Fiscally responsible measures to pay down the deficit are critical as the national debt is about $13 trillion.

The Pay It Back Plan is an important addition to the Wall Street reform bill. Taxpayers who were forced to bring the big Wall Street banks back from the brink of collapse are now assured that the bailout fund is coming to an end. This amendment will ensure that paid back bailout funds will be used to pay down the deficit, so our kids aren't saddled with a debt Washington has been unwilling to pay.

Specifically, the ‘Pay It Back' Plan captures funds from taxpayer investments in financial institutions and auto companies through the Trouble Asset Relief Program (TARP), taxpayer investments to stabilize Fannie Mae and Freddie Mac, and unused stimulus funds and makes sure that these funds are used to pay down the national debt, not for additional spending. It also establishes a sunset for unused stimulus funds.

As of March 31st, 77 TARP recipients had returned a total of $180.8 billion to the U.S. Treasury. The Pay It Back plan will restrict that money from being used for further spending on new programs, and banks will be left to compete against one another without being able to fall back on taxpayers.

The Pay It Back Amendment will:

• Reduce TARP's authority to $550 billion - The amendment prevents Treasury from redirecting unused TARP funds for new programs.

• Restricts Our Ability to Use Paid Back Funds for New Purposes - The TARP contains a recycling provision, which allows Treasury to use repaid TARP funds so long as it does not exceed $700 billion "outstanding at any one time". The Pay It Back Act prohibits Treasury from using repaid funds barring an immediate and substantial threat to the economy arising from financial instability. Instead, such funds will be used for deficit reduction.

• Get Taxpayers' Money's Worth from TARP - As financial institutions regain their health, the Pay It Back Act captures repaid TARP funds and applies those funds for deficit reduction. This includes revenues generated from the sale of Chrysler and GM stocks. The legislation also closes TARP's $700 billion revolving door of credit. Although many companies have largely recovered and repaid assistance, TARP currently allows the Treasury to keep $700 billion "outstanding at any one time." The Pay It Back Act restores this funding back to the Treasury.

• Get Taxpayers' Money's Worth from Fannie Mae and Freddie Mac - The Pay It Back Act requires taxpayer investments from the sale of Fannie Mae and Freddie Mac stock or securities to be used for deficit reduction. It also requires the Federal Housing Finance Agency (FHFA) to provide a report to Congress on efforts to ensure the American taxpayer does not suffer unnecessary losses.

• Exercise Responsible ARRA Oversight - The Pay It Back Act requires inspectors general and agency secretaries to identify and capture any ARRA funds that have been turned down or unobligated by the federal government and directs such funds to pay down the national deficit.

• Establish an ARRA Sunset - The Pay It Back Act ensures that ARRA funds not obligated by the federal government by December 31, 2012, will be returned to the Treasury and used to pay down the national deficit.

The Pay It Back Act does not undermine emergency and recovery efforts. Rather, it sets a schedule for getting the government out of the business of owning businesses. This bill looks critically at open-ended policies - created to weather a real economic disaster - and establishes a responsible way forward that will benefit the American taxpayer.

Locations

I have eight offices in Colorado to serve you... roll over the location nearest you for contact information, or visit the contact page for a full list of offices

Four Corners Office

835 East 2nd Avenue, Suite 206 Durango, Colorado 81301 Phone: (970) 259-1710 Fax: (970) 259-9789

Pikes Peak Office

409 North Tejon St., Suite 107 Colorado Springs, 80903 Phone: (719) 328-1100 Fax: (719) 328-1129

North Central Office

1200 South College Avenue, Suite 211 Fort Collins, CO 80524 Phone: (970) 224-2200 Fax: (970) 224-2205

High Plains Office

109 East Railroad Avenue, #4 Fort Morgan, Colorado 80701 Phone: (970) 542-9446 Fax: (970) 542-3088

Northwest/I-70W Office Northwest Colorado Office

225 North 5th Street, Suite 511 Grand Junction, Colorado 81501 Phone: (970) 241-6631 Fax: (970) 241-8313

Denver Metro Office

2300 15th St., Suite 450 Denver, Colorado 80202 Phone: (303) 455-7600 Toll Free: (866) 455-9866 Fax: (303) 455-8851

Arkansas River Office

129 West B Street Pueblo, Colorado 81003 Phone: (719) 542-7550 Fax: (719) 542-7555

San Luis Valley Office

609 Main Street, Suite 110 Alamosa, Colorado 81101 Phone: (719) 587-0096 Fax: (719) 587-0098

Washington, D.C. Office

702 Hart Senate Office Building Washington, DC 20510 Phone: (202) 224-5852 Fax: (202) 228-5036

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