Does Mr. Frank Not Want Taxpayers to be Repaid?by Tim Manni
The government made a deal with taxpayers’ money. Washington agreed to lend large financial institutions billions of dollars in exchange for shares of their preferred stock. Not only were these institutions to pay back their loans in full, but they are under agreement to pay a dividend on the government’s shares. The TARP program was designed for the U.S. to turn a profit and repay taxpayers. Now that may not happen:
…Rep. Barney Frank, the chairman of the House Financial Services Committee, has come up with a proposal to spend any TARP profits before they can be returned to the taxpayers. Last Friday, Frank introduced the “TARP for Main Street Act of 2009,” a bill that would take profits from the program and immediately redirect them toward housing proposals favored by Frank and some fellow Democrats.
Frank’s proposal comes at a time when Republicans, and some Democrats, are expressing concern about the continued use of TARP money. Republican Sen. Orrin Hatch recently complained that TARP funds are “now being used as a go-to solution to address all of our nation’s economic ills.” Hatch and Democratic Sen. Blanche Lincoln recently introduced a bill that would require that TARP money goes back to the Treasury for debt reduction.
Spending the dividend payments now, as Frank proposes, would reduce the chance that TARP might ever be a break-even deal for the taxpayers. “We don’t know if TARP is going to be making any money, so taking the dividend payments going back to Treasury is pretty questionable,” says one House GOP aide. Indeed, in its June report, the [General Accountability Office] GAO revealed that 17 troubled institutions have not paid their dividends, much less repaid the TARP money itself. And last week, the Wall Street Journal reported that three other institutions were not paying dividends. But now, Frank is proposing that dividends be spent immediately. “It defeats the idea of taxpayer protection,” says the GOP aide.
Last week we reported that Mr. Frank is heading up a separate but similar initiative to drum up support for under-qualified condo buyers. At this stage of the game — housing statistics haven’t fully indicating we’ve even reached the bottom of the housing crisis — Mr. Frank has begun pushing laws that could potentially land the American taxpayers back in the hole we are still trying so hard to dig ourselves out of.
This type of nonsensical leadership really gets us fired up. If the Congressman really wanted to make a ‘TARP for Main Street’ he should have done exactly that — give Main Street back their TARP money instead of looking for somewhere else to spend it.
We sure as heck want our taxpayer dollars back, how about you?