[Congressional Record (Bound Edition), Volume 155 (2009), Part 1]
[Senate]
[Pages 590-591]
[From the U.S. Government Publishing Office, www.gpo.gov]




                                  TARP

  Mr. VITTER. Mr. President, yesterday, President Bush announced that 
he was sending to Congress formal notice regarding use of the second 
half of TARP, the Troubled Asset Relief Program. As you know, under 
that legislation, which Congress passed over my objection last year, 
once $350 billion of the fund--half of the fund--is spent, and the 
administration wants to begin spending the second half of the fund--the 
second $350 billion--the President has to formally notify Congress. 
Under the program, Congress has the opportunity to basically veto 
moving forward by affirmatively having to pass a resolution of 
disapproval.
  Again, President Bush took that first step of formally notifying 
Congress yesterday and today.
  I come to the Senate floor to announce that I am introducing a motion 
of disapproval, and I encourage my colleagues, Democrats and 
Republicans, to think very seriously about this matter and to join me 
in this motion of disapproval. In doing so, I am immediately joined by 
several colleagues, and I want to thank Senators Bunning, Sessions, 
DeMint, Barrasso, and Inhofe for being original cosponsors with me of 
the resolution of disapproval.
  When we debated this very important matter on this floor several 
months ago, I expressed serious concerns. I will not go through my 
comments then or my concerns, but unfortunately, sadly, many of them--
virtually all--have been proven true. The history of this program--the 
Troubled Asset Relief Program--has indeed been very troubled, very 
concerning, and it raises far more questions and hesitations than it 
provides answers for our ailing economy. So as we revisit this issue, I 
cannot support moving forward with this very troubled program, 
primarily for five reasons.
  First among those reasons is the most fundamental test we should 
bring to the matter: Has the program worked? I think it is very clear 
it has not worked. The purpose of the program was to ease the credit 
crisis. The entire focus of the program was to get credit on the 
streets of the American economy, to provide reasonable credit to 
consumers and businesses. Yet our economy is still gripped by a real 
credit crunch. So that fundamental purpose of the program, that 
fundamental test of the program has simply not been met.
  Now, Mr. President, in this new year, and under the new 
administration, we are going to debate and act on other measures, 
particularly the stimulus plan, a stimulus plan which will spend 
upwards of $1 trillion that President-elect Obama has talked about and 
begun to outline. Certainly, we must act on the economy. Certainly, we 
are in a very serious recession. Almost certainly, it is the most 
serious, the worst since World War II, and, certainly, the Federal 
Government needs to help lead the way, to be a big part of the solution 
to get us out of this deep financial recession. But as we move to a $1 
trillion stimulus program, why are we going to simply continue with a 
program that hasn't worked, spending another $350 billion? Again, as we 
mount trillions of dollars of new deficit spending, deficits upon 
deficits, debt upon debt, surely we should think long and hard about 
continuing another $350 billion of spending in a very troubled program 
which has not begun to meet its fundamental goal.
  The second reason I would suggest we should not continue down this 
path is that the entire program, as it was outlined to Congress, as it 
was explained to us by the Treasury Secretary and others, has never 
been implemented. It was thrown out the window even before it could 
begin to be implemented. As all of us remember, just a few months ago, 
when the Treasury Secretary proposed this idea before Congress, it was 
indeed supposed to be the Troubled Asset Relief Program under which the 
Government would buy troubled assets from a spectrum of financial 
institutions, get those assets off the books of the financial 
institutions, and make those institutions far healthier and far more 
able to extend credit to individuals and businesses across America.
  That was the beginning, that was the middle, and that was the end of 
the program. That was what every explanation, every presentation was 
about as the Treasury Secretary, the Chairman of the Federal Reserve, 
and others came to Capitol Hill to explain this program over several 
weeks. It wasn't part of the program, it was the entire program. Yet 
within a couple of weeks of Congress passing the Troubled Asset Relief 
Program--again, over my objection--that plan was completely thrown out 
the window. Congress acts to pass a $700 billion spending program, 
forging completely new ground in terms of economic policy and the 
Government's intervention in the market, and within a few weeks of that 
action, plan A is completely out the window and the Treasury Secretary 
sets about forming plan B and doing something fundamentally different 
than was presented to Congress.
  I have suggested over the last several weeks, along with my 
colleagues, that alone should make the administration come back to 
Congress and get reauthorization for what is a completely new program. 
That, again, is my second reason we should not continue the TARP and 
continue going down this path and spending the second $350 billion of 
this program.
  The third reason I would offer is closely related to the second. As I 
said, within 2 weeks of Congress passing this legislation, the whole 
program changed. The entire concept of buying troubled assets was out 
the window, and Treasury had a brandnew plan, which was never presented 
to Congress and never discussed in any level of detail. So what has 
happened is, the TARP has become a veritable slush fund for the 
administration to do whatever it wants with it, to use it in whatever 
way it wants. After throwing the TARP idea out the window, Treasury 
came up with a capital purchase program to purchase preferred stock and 
warrants of certain institutions. It also established a systematically 
significant failing institution program, allowing Treasury to invest in 
any financial instrument, including debt, equity, or warrants 
determined to be troubled assets. Now Treasury says it ``continues to 
explore other programs, including those focused on insurance, 
foreclosure mitigation, consumer lending, and more.''
  This program has no definition, it has no limits, it is whatever 
Treasury and the administration want it to be. It is a wide open slush 
fund for whatever the perceived need or want is of the moment. Of 
course, the best example of that is use of funds from this program for 
the auto bailout. After explaining for weeks that this program was not 
designed to do anything like the auto bailout, and use of these funds 
in an auto bailout would be completely inappropriate, the Bush 
administration then proceeded to use some of this money on the auto 
bailout. It is wide open. It has no limits. It has become a

[[Page 591]]

slush fund for whatever the administration believes it has to do at the 
moment. That is not a proper way to move forward in terms of remedying 
the economy.
  Fourth, we should end this program, and we should pass my resolution 
of disapproval because there has been no accountability whatsoever on 
this program. Remember, we spent a lot of time debating accountability 
months ago when this matter was before the Senate and before the House. 
There were all sorts of promises about accountability. There were all 
sorts of protections put in the bill regarding accountability. Yet what 
has that produced? That has produced the biggest embarrassment in terms 
of a lack of accountability, at least since Hurricane Katrina, and that 
is saying a lot.
  The GAO and other watchdog groups report that the Treasury 
Department--the Treasury Department in charge of this fund--cannot even 
tell us precisely how the first $350 billion has been spent. Treasury 
doesn't know, much less the watchdogs of other protections Congress was 
supposed to have put in place.
  Now, we hear all sorts of promises and commitments from congressional 
leaders and leaders of the Obama transition that this is all going to 
change: There is going to be real transparency, there is going to be 
real accountability, and we are going to know where every penny goes. I 
don't doubt for a minute the goodwill and the honesty of those 
pronouncements. I am sure the congressional leaders and folks in the 
Obama transition who say these things mean it and want it. The problem 
is, I think folks were equally as sincere a few months ago, and it 
produced absolutely nothing in terms of transparency and accountability 
and protection of taxpayers' hard-earned tax dollars.
  Surely we should demand more than another round of promises. Surely 
at a minimum we need to see exactly what the plans for the second half 
of TARP are before we decide this matter. Surely we need to see the 
details of any new accountability program. Yet we have seen none of 
that. Yet we are scheduled, in the Senate, to vote on this resolution 
within days without having any ability to see those plans, to see those 
protections, to see those new accountability measures before the vote. 
We cannot accept that. We must pass a motion of disapproval and only 
consider continuing this type of program if it is represented to 
Congress with those protections, with those detailed plans.
  Finally, my fifth and final reason for urging all of my colleagues to 
join me in this resolution of disapproval is that, at its very core, 
TARP is a dangerous, heightened intervention of the Government in the 
private sector.
  Let me restate what I said a few minutes ago. We are in the midst of 
a horrible recession, which is still getting worse. It is almost 
certainly the worst recession since World War II. Clearly, the Federal 
Government needs to play a leadership role in helping the country and 
the economy turn the corner. I do not doubt that for a minute. But the 
sort of intervention of TARP and actions in the Treasury Department 
over the last several months are fundamentally different from any other 
economic policy actions we take here at the Federal level. It is 
picking winners and losers. It is getting involved, not in the 
direction of the economy but in individual companies, in individual 
potential bankruptcies, in individual mergers and deals and 
acquisitions. That is a level and type of intervention that is 
fundamentally different from broad fiscal policy, from broad monetary 
policy. It really is moving the line significantly in terms of 
Government intervention in the private sector.
  Going back to our original debate here in the Senate, that was one of 
my most fundamental reservations from the beginning with TARP, that 
type of detailed intervention--and, by the way, the invitation for 
malfeasance and corruption that it can bring when Government 
bureaucrats are making very important life-or-death economic decisions 
regarding individual firms and individual transactions. I do not think 
we should continue down that path. I think that path is riddled, 
littered with mistakes and troubling actions by the Federal Government 
picking winners and losers, getting involved in individual companies in 
a very direct way--individual transactions, putting the hand of the 
Government in the boardroom in that sort of really unprecedented way.
  I urge all of our colleagues, Democrats and Republicans, to think 
carefully about this issue. We had a significant debate when this first 
came to Congress several months ago, and we had several votes on the 
matter. Obviously, eventually it passed without my support. But since 
then, we have seen a lot, we have learned a lot, and a lot has changed. 
Since then, virtually all of the arguments against the program have 
been borne out and new concerns and new questions have arisen. They go 
to my five points. The program has not eased credit on the street. The 
entire premise of the program was thrown out 2 weeks after Congress 
passed it. No. 3, it has become a catchall slush fund and the purpose 
and parameters of the program change week to week. No. 4, there has 
been no accountability; Treasury cannot even tell us today precisely 
how the first $350 billion was spent. No. 5, at its core this program 
is about Government intervention in a way we have not seen before, 
picking winners and losers.
  I urge my colleagues to join in this resolution of disapproval so we 
can start anew, so we can put new protections in place, so we can act 
on the economy but not simply continue down this path and spend another 
$350 billion, adding deficit on deficit, debt on debt, without a clear, 
positive result for American families.
  I yield the floor. I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. CARDIN. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.

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