Whether TARP’s sun sets at the end of the year or is allowed to rise once again in 2010 is being hotly discussed in the U.S. Treasury these days.  The Troubled Asset Relief Program (TARP) designated $700 billion to support ailing banks, but the funds were also distributed to automakers and insurance companies.  And most recently, the U.S. Treasury plans to buy toxic assets using private and public funds.

All in all, about $128 billion TARP funds are still on the table.  And the funds could mean big investment in small business.  The U.S. Treasury is reportedly developing initiatives to use that money on bolstering small businesses and community banks.

Vocalizing these grievances, 40 senators– 39 Republicans and 1 Democrat– sent a letter to U.S. Treasury Secretary Timothy Geithner last week prodding him to allow TARP to end as scheduled on December 31st 2009.  They support applying the balance of TARP funds towards repaying the national debt, which is expected to reach over $12 trillion over the next few months.

However, there is also talk of extending the program into 2010– or at least holding on to part of the $128 billion balance that remains from the funding measure.  Though the Federal Reserve is cautiously optimistic about an economic upturn, the Treasury want to retain access to a portion of the funds in case there are any unexpected rough patches with economic recovery.

 

Related Resources:

  • Battle Brews Over Unused TARP Cash (Wall Street Journal)
  • TARP sets sights on original purpose (UPI)
  • No sign that bailout will expire at year’s end (Huffington Post)
  • TARP: Treasury Looks to Shift Rescue’s Focus To Small Businesses and Community Banks (Washington Post)
  • TARP Funds Opening to Small Businesses? (FIndLaw’s Free Enterprise)

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