September 19, 2009

GOP senators urge end to TARP fund

A group of mostly Republican U.S. senators say Treasury Secretary Timothy Geithner should wrap up the program used to bail out banks by the end of the year.

The $700 billion Troubled Asset Relief Program will automatically terminate next month unless Geithner moves to extend it. On Friday, a group of 40 senators led by by John Thune, R-S.D., urged him to decline to do so, the Washington publication The Hill reported.

The Troubled Asset Relief Program was originally designed and proposed to Congress as a measure to help failing banks get toxic assets off their books while they regained financial stability, said Thune. In reality, TARP has been used to take ownership interests in banks, insurance companies, and automakers.

Thune has criticized the use of TARP funds to bail out troubled automakers, saying that was an abuse, while also noting that billions of dollars in the fund have gone unspent.

The Treasury Department has indicated it is seeking to wind down the government's direct involvement in stabilizing large banks but is moving cautiously in an effort to avoid triggering a relapse of last year's financial sector meltdown.