John Thune

Posted: November 18th 2009

From the Argus Leader:

Writing a letter didn't work, so Sen. John Thune is sponsoring a bill to close down the federal program that allows the government to take over failing industries.

The South Dakota Republican is the lead author of legislation that would end the Troubled Asset Relief Program (TARP) when it expires Dec. 31. The Obama administration has the option of extending the program - which has used billions in taxpayer money to bail out banks and automakers - for another 10 months.

Speaking at a Capitol Hill news conference Tuesday, Thune blasted the administration's handling of a program he voted to create last year under then-President George W. Bush.

He said TARP was designed to prevent a financial meltdown - which it did - not to become a "political slush fund" to bail out a host of institutions and businesses, such as General Motors, at taxpayer expense.

"We ought to end the program," Thune said. "Let's do (what's) in the best interest of the federal taxpayer."

Thune wrote a letter, signed by 38 Republican senators and one Democrat, to Treasury Secretary Tim Geithner in September asking him to let the program expire by year's end. Any TARP money left over or subsequently repaid by banks and other recipients should be used to reduce the federal deficit, the letter said. Thune said he never heard back, prompting the bill.

Treasury spokesman Andrew Williams said Tuesday that no decision had been made on whether to extend the program. But he cautioned against tying the government's hands.

"We share Sen. Thune's goal of restoring financial stability at the lowest possible cost to taxpayers," Williams said in a statement. "At the same time, the U.S. economy has just begun to grow again, and far too many Americans are unemployed, so we should be careful about limiting government's ability to respond to the crisis while recovery remains fragile."

South Dakota Democratic Sen. Tim Johnson has defended the administration's handling of TARP, saying the Treasury should have the flexibility to use the money where needed, assuming proper oversight.

In creating TARP, Congress allowed the Treasury to invest up to $700 billion to rescue financial institutions on the verge of collapse. Williams said the government has recouped more than $70 billion in repayments from banks as well as $9.9 billion in dividends and warrant sales. More than $300 billion remains unobligated, according to Thune's office.

Among the financial institutions in South Dakota that have received TARP money are HF Financial Corp. of Sioux Falls, which received $25 million a year ago and repaid it in June, and Stockmen's Financial Corp. in Rapid City, which received $15.6 million, according to Treasury documents.

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