“Despite the objections of many Republicans, they were able to use TARP for the auto bailouts because they were able to claim that the car manufacturers were toxic assets under the terms of the original TARP law,” said Brad Dayspring, press secretary for Rep. Eric Cantor (R-Va.). “That claim cannot be made for highway/infrastructure projects.”
But an administration official says that’s not what Obama intends to do. Instead of using TARP funds to finance a new jobs bill, the administration will simply declare that it needed less under TARP than originally thought. Since TARP was effectively a line of credit, and the Treasury has not drawn down the unused funds, Congress has some room to spend money on a new bill without increasing the projected deficit…
As the official explains: “The idea is not to take dollars that are in TARP and spend them on something else. Instead, TARP has used less than expected, and that frees up Congress to spend other new money.” That leaves unresolved the controversy about what to do with the TARP profits — yes, profits — since many of the banks that have returned the money they borrowed have also paid hefty interest, totaling into the billions of dollars.
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