Senate rejects Bob Bennett's move to end TARP bailout

WASHINGTON — The Senate on Thursday rejected a move co-led by Sen. Bob Bennett, R-Utah, to end the Troubled Asset Relief Program that bailed out banks, and to require that repaid money go only to deficit reduction and not to other bailout efforts.

A majority of senators — 53-45 — voted for the amendment pushed by Bennett and Sen. John Thune, R-S.D. However, rules for the debate required 60 votes for passage. The amendment was proposed to a bill designed to raise the national debt limit.

"We feel there has been a bait and switch here" in how the Obama administration is using repaid TARP money, Bennett told the Senate.

He said senators were told when TARP was created that as bailout money was repaid, it would go toward retiring the extra debt created by the program. But Bennett said the Obama administration is claiming it has authority to use the money to bail out other needy industries.

"This administration has changed the rules from the way we thought we wrote them," Bennett said. "Let's simply end TARP right now, making it clear that the money as it comes back cannot be used for any other purpose."

Bennett, who has been under fire from conservative challengers for voting to create TARP, said he voted for it originally because the banking system faced a crisis and experts said the worldwide banking system could collapse within days without it. He voted against later extensions of it and tried an amendment once previously with Thune to end TARP.

"While the recession continues, the crisis that spawned TARP is over," Bennett told the Senate.

But, he complained, "the Obama administration and members of Congress continue to abuse TARP and treat it like a revolving credit account and, in my opinion, this violates the original intent of the legislation."

He added, "TARP was never created to be a congressional slush fund," and if Congress and Obama were serious about deficit reduction, "then it would have been common sense to end TARP and use all of the returned funds to pay down the debt, as was the original intent of the program."

This story was reported from Salt Lake City.

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