As the end of the year – the original expiration date for the financial market bailout package – draws near, Sen. John Thune (R-SD) will be introducing legislation that would rescind the Administration’s authority to extend the Troubled Asset Relief Program (TARP), which has morphed into an all-purpose slush fund, and has exposed, and continues to expose, taxpayers to huge costs and risks. 

It’s time for the administration to stop putting taxpayers on the hook for politically motivated bailouts.  CFA and ATR have sent a letter endorsing the bill, and urging Sen. Thune’s fellow members to co-sponsor and otherwise support it.  From our letter:

In spite of signs of a recovery of the financial markets, all indications are that the Administration will exercise its authority to extend the Troubled Asset Relief Program beyond its initial expiration date of December 31, 2009. The program, however, has far outgrown its scope and initial purpose and has been turned into an all-purpose bailout slush fund used for political expediency.

Your legislation would eliminate the authority granted to the Administration under the Emergency Economic Stabilization Act of 2008. In doing so, it would not only keep the unobligated funds under TARP – as of September amounting to $317.3 billion – from being wasted on politically-motivated bailouts of companies and industries well-outside the original scope of the program, which have left taxpayers to bear the cost and risks associated with them. It would also prevent the revolving use of repaid funds for these purposes.

James Madison once said “Since the general civilization of mankind, I believe there are more instances of the abridgment of freedoms of the people by gradual and silent encroachment of those in power than by violent and sudden usurpations.” It is time to end this “gradual and silent encroachment of those in power” of which the TARP program has become a tool.