7th District Lawmaker Says TARP Not Slush Fund For More Federal Spending

WASHINGTON – Congressman Leonard Lance, (NJ-07), one of the leading voices in Congress to reduce the Nation’s debt, today renewed his call to allow the Trouble Asset Relief Program (TARP) to expire at the end of this year and direct repaid funds and interest toward debt reduction. Various news outlets have reported that leaders in Congress are planning on tapping bank bailout funds for a second federal stimulus spending bill.

“The TARP law was meant to provide a one-time infusion of funds raised to help stabilize a financial system on the brink of failure,” Lance said. “Yet there are some leaders in Washington that see the TARP funds as a trough of unspent money for more federal spending. That’s wrong and fiscally irresponsible at a time when our federal debt stands at more than $12 trillion.”

In a letter to Treasury Secretary Geithner, Lance and more than three dozen House Republicans have asked that the program be allowed to expire at the end of the year and direct the more than $325 billion to debt reduction.

The letter was prompted by news reports like one found in today’s New York Times that said, “Democrats in Congress have already decided to divert about $70 billion from what is left in the bailout fund to the cost of additional road-building and other construction projects, credit to small businesses and further aid to state and local governments.”

“In order for the government to exit from the unprecedented interventions of the past year and a half, the government must first stop spending funds on more interventions,” the lawmakers urged Geithner. “The emergency has ended, and TARP must end as well.”

Lance is a cosponsor of legislation (H.R. 2119) that would require the U.S. Treasury to apply TARP funds to debt reduction. In June the Seventh District lawmaker called on President Obama and the Secretary of the Treasury to direct TARP monies to deficit reduction. And as a member of the House Financial Services Committee Lance has voted five times to protect taxpayers from misuse of the TARP fund.

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