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Troubled Assets Relief Program (Tarp) the Bipartisan Dilemma

Updated on May 16, 2019
Abecedarian profile image

While I agreed that we needed to bail out small banks and community institutions, wall street was not someone that I would bail out.

Mitch McConnell
Mitch McConnell | Source
John Boehner
John Boehner | Source
Eric Cantor
Eric Cantor

What is TARP and where did it come from?

During the Bush Administration, when the financial industry was failing, President Bush, along with Republicans and Democrats, to include then Senator Obama, pushed for the TARP (Troubled Assets Relief Program), which gave financial aid to banks and other financial institutions, to include small community banks as well as Wall Street.

Rush Limbaugh, trying to start a wedge issue, stated that "not" one Republican voted for it. Yet many Republicans voted for the Emergency Economic Stabilization Act of 2008, which authorized the creation of TARP. In the three votes leading to the creation of TARP, Republicans voted "yes", 65 in the House, 34 in the Senate and 91 in the final House bill that made it's way to President Bush for his signature.

Politicians of both parties supported TARP

Top Republicans that voted yes:

  • Eric Cantor
  • John Boehner
  • Mitch McConnell
  • John McCain
  • John Thune

It was John Thune that described the urgency of this bill best when he said, "The economy is in a meltdown, the credit markets are frozen and if we didn't take steps it would be disastrous for our country."

The financial panic was real. Don't Americans remember this? If not for the TARP, 3.3 million people would have been homeless. The bill allowed them to avoid foreclosure or find alternate affordable homes.The TARP bill prevented a financial collapse that would have made life even worse for the American people.

Misinformation

In 2009, Freedom Project (Republican PAC) and other conservative groups took to blaming the Washington Democrats for the $1.42 trillion dollar budget deficit and the fact that they had passed the TARP, calling it the Democratic Bailout.

The FACT: The first fiscal year for Obama and his administration was from October of 2008- September of 2009. Who was responsible for the deficit from that year? A Republican President and a Democratic Congress. Both parties are guilty of the debt that has escalated. So to blame it solely on the Democrats or the Republicans for that matter is incorrect.

Big Ticket Items on the deficit- from 2008 (that weren't paid for) $133 billion for TARP, $291 Billion for Fannie Mae and Freddie Mac, two wars and the medicare prescription plan to name a few. Under Obama in 2009, $155 billion stimulus, two wars, etc. And let us not forget, that when people don't work, they don't pay taxes, which puts the country at a shortfall in tax revenue.

Was the TARP successful?

In a word, Yes. In June of 2009, the first round of payments actually turned a profit. In 2010, repayments exceeded expectations bringing the cost to taxpayers at approximately $50 billion, not $700 billion. Three-quarters of the TARP funds had already been returned.

The best thing to come out of the TARP:

The Dodd-Frank Act. brought on by the Obama administration, it will not allow another "bailout" again, if we found ourselves in a similar situation, it would safe guard the American people from having their tax dollars used again. Instead, the institutions would be dismembered.

The worst thing to come out of the TARP:

The political blame game and divisiveness that turned American's against each other.

A
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Washington, DC, USA

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© 2010 Lady Liberty

Comments

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    • Abecedarian profile imageAUTHOR

      Lady Liberty 

      10 years ago from These United States, Texas

      Great comments, as always all opions welcome, right or wrong depends on what you believe, facts are just a stone in the path these days.

    • Jed Fisher profile image

      Jed Fisher 

      10 years ago from Oklahoma

      TARP saved a handful of blood-sucking leeches. Without TARP, about 200 Wall Street suits would be in the soup line but the rest of us would be getting along just fine, and about 300 local banks would still be in business. Thanks to TARP, we have an ever-growing international banking monopoly which is mugging us at the grocery store and the gas pump every day. TARP was, and is, a scam. Don't believe the hype!

    • JT Walters profile image

      JT Walters 

      10 years ago from Florida

      TARP didn't keep the credit markets open for the average person or small businesses. You would have to understand why America would involve itself in Chinese mortgages, have a perspective on history in world markets and understand the cycle of abuse which we call free markets.

      I liked your artilce it was well written but lacked any factual basis. We are ina decade long inflationary recession which will drain the USA economy to the point of an Inflationary Depression. Actually we are pretty close to the Inflationary Depression regardless. TARP didn't work but it was a well wrtten article.

    • Abecedarian profile imageAUTHOR

      Lady Liberty 

      10 years ago from These United States, Texas

      Thanks HSchneider, and you know that if they see a profit, they'll never admit it either. I long for the days when Dems and Repubs worked together for the best of the American people and not the best for the party.

    • profile image

      Howard Schneider 

      10 years ago from Parsippany, New Jersey

      This country's economy would still be in a deep depression without TARP. The Far Right such as with the above comment, forget how bad things were. They see ideological dogma and nothing else. The Republicans will send out any lies to whip up their base to get out and vote and win. They have no scruples. Eventually the American taxpayer may even see a profit off this. TARP was an example of how government works when 2 sides get together especially during dire times. Bravo to that Congress and the Bush administration which is something I rarely say. Your Hub was right on.

    • Abecedarian profile imageAUTHOR

      Lady Liberty 

      10 years ago from These United States, Texas

      So what you are saying is that all these years that these career politicians were elected by YOU and YOURS in the Republican Party, unless you've never voted before, were elected by phony GOP voters? Sorry, American Romance, your point makes no sense.

    • American Romance profile image

      American Romance 

      10 years ago from America

      I thought you said republicans voted for it? Everyone you listed simply run on republican tickets, we never considered any of them to be true Republicans. .........point void

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