It might have been one of the most audacious moves in Erik Paulsen’s first year in Congress: An amendment to pull the plug on the Bush-era Troubled Asset Relief Program (TARP), the controversial $700 billion bailout of Wall Street financial firms.
But, alas, the Minnesota Republican’s effort died in the House Financial Services Committee Tuesday, the victim of a largely party-line vote of 37-30.
Paulsen’s proposal would have ensured that the TARP expires on December 31, as originally envisioned. Some remaining $200 billion in uncommitted funds would then be used to pay down the deficit.
While that’s already the plan, Democratic leaders oppose the idea of stripping authority from Treasury Secretary Timothy Geithner, who, with notification to Congress, can extend the program to October, 2010.
Paulsen’s effort to remove this trigger was offered as part of the Financial Stability Improvement Act of 2009, currently being marked up on the panel. Sensing anti-bailout sentiment across the land, a similar proposal has been made in the Senate by John Thune, R-S.D.
“Taxpayers are tired of the revolving door of bailouts and deficit spending in Washington,” said Paulsen, citing testimony by a special a special Inspector General overseeing the TARP funds that the program will “almost certainly” result in taxpayer losses.
“TARP funding is simply becoming walking-around money for the government, and today my colleagues missed an important opportunity to bring this program to a close.” Paulsen said.
A stand-alone bill may now be in the offing.