This was a vote on a motion by Rep. Dent (R-PA) that would have sent back to committee legislation designed to implement the most significant regulatory reform of the financial industry since the Great Depression. The motion would also have instructed the committee to delete all the reform provisions in the bill, add language terminating the Troubled Assets Relief Program (“TARP”), and requiring all outstanding TARP loans to be repaid with the proceeds used to reduce the national debt. TARP loans had been used to “bail out” major financial institutions and companies during the recent financial crisis.
Rep. Dent noted that TARP “was originally enacted as a temporary plan to address an extraordinary crisis in our financial markets as a result of the collapse of financial firms that the government said were just ‘too big to fail’ . . . (T)hose who voted for . . . TARP did so with the assurance that the money would be returned to taxpayers. It is unfortunate that the President chose to extend the TARP . . . .”
Dent then referenced recent reports that the Obama Administration was planning to use repaid TARP funds for a jobs-creation program. He said: “Haven't we learned that if we want to create jobs and grow our economy, we must support the private sector and invest federal dollars sparingly and wisely . . . Raiding TARP to fund more government programs that don't create jobs verges on the reckless.”
Rep. Frank (D-MA), the chairman of the Financial Services Committee, spoke against the motion. He referred to it as “a cover” that uses “anger over the TARP to frankly make sure we'll need another one because (the motion would) kill all regulation.” Referring to the fact that the TARP was instituted in response to the recent financial crisis, he noted that “it ain't over until it's over on Main Street all throughout America (and) . . . most of us know the emergency is not over.”
Frank then noted: “The original TARP legislation said . . . any TARP shortfall will be made up by an assessment on the financial community. We've gone further than that. The amendment we (previously added to H.R. 4173) . . . instructs the FDIC . . . to assess the financial institutions to make up any shortfall from the TARP. (This motion would) kill that . . . (The Republicans) are very upset that we might levy on JPMorgan Chase and Morgan Stanley and Goldman Sachs and the others some responsibility financially for what's gone on.”
Frank went on to say: “So here's what (the Republicans) do (with this motion): First of all, they kill all reform, and . . . secondly, say now that TARP money has gone to the big banks, and they don't have to pay it back . . . they want to get rid of it, and to whose benefit? The big banks.” Frank concluded his remarks by saying that, if the motion carried, it will be saying “let's not do anything to change the financial system . . . Let's just . . . save the big banks from having to pay their fair share when the TARP is repaid.”
The motion to send the bill back to committee was defeated by a vote of 190-232. One hundred and seventy-one Republicans and nineteen Democrats voted “aye”. All two hundred and thirty-two “nay” votes were cast by Democrats. As a result, the provisions in H.R. 4173 remained in the bill implementing the most significant regulatory reform of the financial industry since the Great Depression and language ending the TARP was not added to the bill.