[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[S. 862 Introduced in Senate (IS)]

111th CONGRESS
  1st Session
                                 S. 862

To require the Secretary of the Treasury to use any amounts repaid by a 
   financial institution that is a recipient of assistance under the 
           Troubled Assets Relief Program for debt reduction.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             April 22, 2009

   Mr. Thune introduced the following bill; which was read twice and 
    referred to the Committee on Banking, Housing, and Urban Affairs

_______________________________________________________________________

                                 A BILL


 
To require the Secretary of the Treasury to use any amounts repaid by a 
   financial institution that is a recipient of assistance under the 
           Troubled Assets Relief Program for debt reduction.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Debt Reduction Priority Act''.

SEC. 2. FINDINGS.

    Congress finds the following:
            (1) On October 7, 2008, Congress established the Troubled 
        Assets Relief Program (TARP) as part of the Emergency Economic 
        Stabilization Act (Public Law 110-343; 122 Stat. 3765) and 
        allocated $700,000,000,000 for the purchase of toxic assets 
        from banks with the goal of restoring liquidity to the 
        financial sector and restarting the flow of credit in our 
        markets.
            (2) The Department of Treasury, without consultation with 
        Congress, changed the purpose of TARP and began injecting 
        capital into financial institutions through a program called 
        the Capital Purchase Program (CPP) rather than purchasing toxic 
        assets.
            (3) Lending by financial institutions was not noticeably 
        increased with the implementation of the CPP and the 
        expenditure of $250,000,000,000 of TARP funds, despite the goal 
        of the program.
            (4) The recipients of amounts under the CPP are now faced 
        with additional restrictions related to accepting those funds.
            (5) A number of community banks and large financial 
        institutions have expressed their desire to return their CPP 
        funds to the Department of Treasury and the Department has 
        begun the process of accepting receipt of such funds.
            (6) The Department of the Treasury should not unilaterally 
        determine how these returned funds are spent in the future and 
        the Congress should play a role in any determination of future 
        spending of funds returned through the TARP.

SEC. 3. DEBT REDUCTION.

    (a) In General.--Title I of the Emergency Economic Stabilization 
Act of 2008 (12 U.S.C. 5211 et seq.) is amended by adding at the end 
the following:

``SEC. 137. DEBT REDUCTION.

    ``Not later than 30 days after the date of enactment of this 
section, the Secretary of the Treasury shall establish a procedure 
whereby--
            ``(1) any amounts received by the Secretary for repayment 
        of financial assistance or for payment of any interest on the 
        receipt of such financial assistance by an entity that has 
        received financial assistance under the TARP or any program 
        enacted by the Secretary under the authorities granted to the 
        Secretary under this Act, including the Capital Purchase 
        Program, are deposited in the General Fund of the Treasury; and
            ``(2) the Secretary--
                    ``(A) dedicates any such amounts so received for 
                the sole purpose of debt reduction; and
                    ``(B) is prohibited from using such amounts as an 
                offset for other spending increases or revenue 
                reductions.''.
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