R.I.P., TARP: Government Rescue Ends Sunday
$700 billion economic rescue plan has become political football.
Sept. 30, 2010 -- R.I.P., TARP. The government's $700 billion taxpayer bailout of the financial system will come to an end Sunday, bringing to a close one of the most controversial programs in economic history.
But the political ramifications of the Wall Street bailout live on -- and seem sure to haunt lawmakers come November.
Supporters say the Troubled Asset Relief Program rescued the country from another Great Depression. Critics counter that it simply handed money to the same Wall Street banks that plunged the country into recession in the first place and, moreover, it failed to help Main Street Americans.
The political back-and-forth has been fierce. Republicans, led by President Bush, first pushed the program through Congress in the fall of 2008. But with the 2010 mid-term elections fast approaching, Republicans are trying to capitalize on the program's unpopularity by tying Democrats -- including President Obama -- to the bailout.
In fact, "bailout" has become the dirtiest word in politics, with Republicans and Tea Party activists especially using it to rail against government spending.
At an Aug. 10 press conference, House Republicans used the word "bailout" no fewer than seven times in criticizing a $26 billion state fiscal aid package that was making its way through Congress.
"The bailouts have to stop. No more bailouts," said Rep. Marsha Blackburn, R-Tenn.
Just last week, Rep. Kevin McCarthy, R-Calif., said in the GOP's weekly radio address that Democrats in the White House and Congress had pushed a bailout policy.
"Our government has failed us," McCarthy said on Sept. 25. "From the billion-dollar bailouts, to the 'stimulus' package that failed to stimulate, to the government takeover of health care, you cried "Stop!" -- but the Democratic Majority in Washington has refused to listen."
The House Republicans' "Pledge to America" vowed permanently to end the program.
Democrats, meanwhile, have been put on the defensive, standing up for a program that was the brainchild of a Republican administration. While the President has repeatedly noted that he understands why the program is so deeply unpopular, he also continues to defend its effectiveness.
Obama said in Rolling Stone magazine last week that the program will ultimately cost taxpayers far less than had initially been feared.
"The truth of the matter is that TARP will end up costing probably less than $100 billion, when all is said and done," he said. "Which I promise you, two years ago, you could have asked any economist and any financial expert out there, and they would have said, 'We'll take that deal.'"
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