John Thune

Posted: June 11th 2009

The Daily Republic Reports:

U.S. Sen. John Thune, R-S.D., today will introduce the Government Ownership Exit Plan Act, a bill that would require the federal government to end its ownership of private entities acquired under the financial-industry bailout, known as the Troubled Asset Relief Program (TARP), by July 1, 2010, according to a new release from his office.

The bill also prohibits the future acquisition of new or additional ownership interests in private firms through the use of TARP funds and prevents the federal government from making management decisions in private companies in which it has an ownership interest.

"Thanks to the federal government’s unprecedented intervention in the private sector, the president has become a de facto CEO managing large segments of our economy and Congress is acting as a 535 member board of directors,” Thune said in the release. “Having the federal government call the shots for private industry is bad for business, bad for the economy, and bad for taxpayers. Government needs to get out of the business of owning American companies, and this legislation establishes a reasonable end date for government ownership and provides a clear exit strategy for taxpayers.”

The Government Ownership Exit Plan would require the sale of any ownership interest such as warrants, preferred stock, or common stock and apply any revenue from the sale of those assets to the reduction of the national debt. The plan would also prohibit the federal government from making or unduly influencing management decisions of private companies such as appointing senior executives and board members.

Over the past year, the federal government has acquired direct ownership in hundreds of private companies, including two car manufacturers, multiple financial institutions, and over 500 banks, the news release said.

Thune’s legislation would give the Treasury secretary the authority to delay divestiture for up to one year if there is a reasonable chance the assets will appreciate to the original purchase value in the near future. The Treasury is also required to report to Congress and provide detailed information on existing government ownership interests in private entities and on any loans or loan guarantees made by the Federal Reserve.

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Thune also recently introduced the Freedom from Government Competition Act (S.1167), a bill that would require federal agencies to rely on private businesses when providing goods and services that are readily available in the private sector. The federal government has identified that roughly 850,000 federal employees perform jobs that can be classified as “commercial in nature,” which means in many instances the federal government is competing directly against main street businesses, Thune's release said.