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Bachus: Democrats' TARP 3.0 Will Do Little To Help The Economy, But Plenty To Drive Up National Debt


WASHINGTON, May 18 -

- Financial Services Committee Ranking Member Spencer Bachus today delivered the following statement during a Full Committee hearing on the Democrats' TARP 3.0 program (H.R. 5297).

"Thank you, Mr. Chairman, for calling today's hearing to consider two recently-introduced bills designed to jump-start lending to small businesses.  While Republicans share the goal of promoting credit availability for small businesses, many of us disagree that the best method for achieving that goal is to create a new $30 billion program that is not paid for and that follows a model of government investment in private businesses that most Americans want to see brought to an end.  The American people have made it very clear they want the bailouts to end and I, for one, am listening. 

"We are told that this new program is not TARP and that no TARP funds will be used to pay for it, but the reality is considerably more complicated than that.  Indeed, Neil Barofsky, the Special Inspector General for the TARP, wrote in a letter to the Appropriations Committee yesterday that ‘in terms of its basic design, its participants, its application process, and, perhaps, its funding source from an oversight perspective, the Small Business Lending Fund would essentially be an extension of TARP's Capital Purchase Program.'

"While I take the Chairman at his word that he has rejected the Administration's original proposal to pay for the new initiative from repaid TARP funds, the fact that no funding source has yet to be identified gives rise to legitimate questions about taxpayer accountability that I believe must be answered before this Committee votes to authorize $30 billion in new spending, particularly on the heels of what we're witnessing in Europe.  At the same time we are cautioning Greece to live within its means, we need to take our own advice.

"Additionally, in a report issued just last week, the TARP Congressional Oversight Panel, chaired by Elizabeth Warren, raised serious questions about the prospects for success of this program.  Former SEC Commissioner Paul Atkins, a member of that panel, is here with us today at the invitation of Committee Republicans, and I look forward to hearing his insights. 

"And while I support the Majority's decision to finally focus on one of the driving causes of the nation's 10 percent unemployment crisis, I cannot support ill-conceived proposals that will likely do little to help the economy, but plenty to drive up the national debt and crowd out funding in the private market for small businesses."

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