“We will be living with the consequences of this ill-advised program years after it has ended.”

WASHINGTON, D.C. — Congressman Jeb Hensarling (R-TX), a former member of the Congressional Oversight Panel (COP) for the Troubled Asset Relief Program (TARP) and the top Republican on the House Financial Services Subcommittee on Financial Institutions and Consumer Credit issued the following statement in recognition of the second anniversary of Lehman Brother’s bankruptcy filing:

“TARP was originally sold as an emergency injection of liquidity to thaw frozen credit markets that when repaid would be used to reduce the deficit.  Unfortunately, it has morphed into a revolving bailout fund to promote the Administration’s political, social, and economic agenda.”

“The second anniversary of Lehman Brother’s bankruptcy filing underscores the stark contrast between forcing failed companies and investors to accept the consequences of their bad decisions through bankruptcy compared to bailing them out through politically driven programs like TARP.”

“Using TARP repayment as a metric of success is a false premise. TARP funds should have always been expected to be repaid.  The repayment metric merely provides political cover for an Administration which chose to distribute bailout funds without regard to making the taxpayer whole.”

“Administration officials point to lowered loss projections for TARP as though they are evidence that the program has worked.   To argue that TARP is a success because taxpayers are going to lose less than some originally predicted is crazy.  CBO’s latest estimate predicts the program will cost the taxpayer a whopping $66 billion dollars – hardly cause for celebration.” 
 
“The ultimate cost of TARP must be measured not only by dollar signs, but also by the level of government involvement it has introduced into the market.  By legitimizing the notion of ‘Too Big Too Fail,’ TARP introduced an unprecedented level of government involvement into the market, paving the way for passage of the Dodd-Frank permanent bailout bill.  We will be living with the consequences of this ill-advised program years after it has ended.”