Wednesday, January 21 – TARP Reform and Accountability Act

H.R. 384 sets new requirements on how the final $350 billion of Troubled Asset Relief Program (TARP) money may be used. The bill does NOT disapprove the President’s request to tap the final $350 billion, but is instead designed to accommodate it.

REASONS TO OPPOSE: (Courtesy of the RSC)

  • Does NOT Block the Remaining $350 Billion of TARP Funds: Instead, the intent of H.R. 384 is to accommodate the President’s request for the final $350 billion.
  • Allows TARP Funds to be Used for an Auto Bailout: The bill includes language similar to H.R. 7321 from the 110th Congress, which allows the “Big Three” to receive taxpayer-financed direct loans. Many conservatives opposed this legislation on the argument that the loans would delay needed structural reforms at the “Big Three,” set a dangerous precedent that any failing company can count on a federal bailout, and dramatically increase the federal government’s interference in the American auto industry.
  • Greatly Increases Federal Involvement in the Financial Services Sector: Among other things, the legislation would have the federal government tell participating companies how much they can pay their employees, what mergers and acquisitions are acceptable, and would give the Treasury Secretary the authority to send a representative to any meeting of the board of directors of a participating company.
  • Expands the Allowable Uses of TARP Money: The bill expands the allowable uses of TARP money to include support of state and local municipal bonds, consumer loans, commercial real estate loans, and automobile companies.
  • Gives the Treasury Secretary VERY Broad Authority: The legislation gives the Treasury Secretary, among other things, the authority to send a representative to any board meeting of a participating company, very broad authority on how to design a $40 billion-$100 billion “Foreclosure Mitigation Plan,” and broad authority on how to enforce a host of other reporting/regulatory requirements created by the bill. Some conservatives may believe that Congress should not delegate such vast authority to a member of the executive branch.

AMENDMENTS:

Several amendments to H.R. 384 were brought to the floor with varying degress of success.

Click here for a list and summary of all the amendments.

Click here to see how the amendments fared.

REPUBLICAN MOTION TO RECOMMIT:
The motion would recommit H.R. 384, the TARP Reform and Accountability Act, back to the House Financial Services Committee with instructions that the committee report the bill back to the House floor forthwith (i.e. instantaneously) with an amendment that does two things:

  • Termination of Final $350 Billion of TARP Funding. The amendment terminates the remaining $350 billion of TARP funding, the final tranche available under the Emergency Economic Stabilization Act.
  • Repayment Plan. The amendment requires the Secretary of the Treasury to develop a plan and a timetable for the repayment of all TARP assistance provided. The Republican MTR requires the Secretary of the Treasury to submit a report to the Congress on the plan developed and the timeline established.

MOTION FAILED 199-228

SEE ROLL CALL VOTE

H.R. 384 PASSED 260-166

SEE ROLL CALL VOTE

REPUBLICAN ALTERNATIVE:
(Courtesy of the RSC)

The Republican Study Committee’s Economic Recovery and Middle-Class Tax Relief Act offers an alternative to the irresponsible H.R. 384 based on three main themes: 1) Support Families through Tax Relief; 2) Provide Economic Relief for American Businesses and Entreprenuers; and 3) Save Future Generations from a Crushing Debt Burden.

For more detailed information on the Republican alternative, check out the RSC’s summary on their website.

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Published in: on January 21, 2009 at 9:41 pm  Leave a Comment  

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