Repeal is moot
Two years after Republicans won control of the House, the lone bill aimed at repealing the Troubled Asset Relief Program died in committee. All money that could be loaned under the program has already gone out, so at this point cancelling TARP is "effectively a moot issue,” said Douglas Elliott of the Brookings Institution.
We should point out also that the Dodd-Frank financial reform law -- another target of Republican ire -- outlawed any new TARP spending when it was passed in July of 2010. A Congressional Research Service report from May 2012 spells out that Dodd-Frank "amended the TARP authority, including (1) reduction of the overall amount to $475 billion; (2) removal of the ability to reuse TARP funds that had been repaid; and (3) removal of the authority to create new TARP programs or initiatives.”
The report notes too that ”the original TARP authority to purchase new assets or enter into new contracts expired on October 3, 2010” -- before Republicans took a majority in the House.
"This is all theatrics,” Lawrence White, a New York University business professor, said when we asked about the notion of repealing TARP now. "Whatever has been lent/spent under TARP is history. There is no new activity, except that some banks are still in the process of paying back their loans to the Treasury.”
Considering the lack of any significant action to repeal TARP and the fact that doing so now would be essentially impossible, we rate this a Promise Broken.
THOMAS, H.R. 189, To repeal the TARP program, accessed Aug. 3, 2012
E-mail interview with Lawrence White of New York University, Aug. 2, 2012
E-mail interview with Douglas Elliott of the Brookings Institution, Aug. 2, 2012
New York Times, "The G.O.P.'s 'Pledge',” Sept. 26, 2010, via Nexis
Congressional Research Service, "Troubled Asset Relief Program (TARP): Implementation and Status,” May 18, 2012
Repeal TARP? The hour is late, experts say
It would make anybody's shortlist of the most unpopular legislation in recent memory: TARP.
It stands for the Troubled Asset Relief Program. Signed into law in October 2008 by President George W. Bush, the program gave unusual financial authority to the U.S. Treasury Department. Lawmakers hoped the move would steer the U.S. economy away from financial collapse.
In the years since, TARP has been vilified, among other things, as a no-strings-attached gift for the financial industry that ignored the needs of ordinary Americans. The program's special inspector general, Neil M. Barofsky, concluded in March that the program "failed to meet some of its most important goals," most notably, its goal to help strapped homeowners keep their homes.
Republicans criticized TARP as a bailout and vowed to cancel it. Rep. Rob Woodall, R-Ga., introduced legislation to repeal TARP on Jan. 5, 2011, soon after Republicans took control of the U.S. House of Representatives. But there's been no congressional action on it since then.
Still, ending TARP faces more hurdles than just congressional inaction. Several experts we spoke said it may be too late to cancel TARP. Much of the program was in the form of loans to troubled financial companies, and many of those loans have now been paid back. So lawmakers could end the program, but it would probably not result in significant savings.
"I'm doubtful that TARP could be 'cancelled' in any meaningful way at this point," said Satya Thallam, director of the Financial Markets Working Group at George Mason University's conservative Mercatus Center.
To sum up, there hasn't been action on legislation would repeal TARP, and experts say repealing it would be a largely symbolic act. We're going to wait and see how events play out, but for now, we rate this promise Stalled.
THOMAS, H.R. 189, To repeal the TARP program, accessed Aug. 10, 2011
The New York Times, Where the Bailout Went Wrong, by Neil M. Barofsky, March 29, 2011
E-mail interview with Satya Thallam of the Mercatus Center, Aug. 9, 2011
E-mail interview with Lawrence White of New York University, Aug. 10, 2011
Interview with Jared Bernstein of the Center on Budget and Policy Priorities, Aug. 9, 2011
E-mail interview with Douglas Elliott of the Brookings Institution, Aug. 9, 2011
E-mail interview with J.D. Foster of the Heritage Foundation, Aug. 9, 2011