This vote was on an amendment by John Thune, R-S.D., that would have ended further spending out of the financial bailout fund created in the early days of the economic collapse in 2009, known as the Troubled Asset Relief Program (TARP).  It also would have required that the country’s “debt ceiling” – the maximum amount the United States can be in debt –be reduced by the amount of TARP funds that banks repay after the bill’s enactment. The amendment was offered to a bill that would increase the statutory debt limit by $1.9 trillion to $14.29 trillion.

Now that banks have begun paying back some of their bailout loans, the TARP fund contains a surplus.  Democrats would like to eventually end the TARP, but for now want to retain the freedom to use those funds in the case of another crisis, or for small business lending programs.  Republicans want to end the TARP immediately and put the surplus money back into the federal coffers to help reduce debt.

Thune said his amendment is a “straightforward way in which we can signal to the American people that we are serious about fiscal responsibility.”

“We are serious about getting this debt under control. We are serious about getting spending under control. This is a very straightforward way to do that. So we are going to have this vote, hopefully, later today, sometime this afternoon. We can save the American taxpayers $320 billion by not spending this amount of money here. We can, hopefully, as these are paid back, save a whole lot more for the American taxpayers,” Thune said.

Chris Dodd, D-Conn., said the Obama administration wants to retain the ability to use surplus TARP money because while the economy is showing signs of recovery, small businesses and community banks are still having trouble.

“The administration has sent a letter committing to limit the use of these dollars to mitigating foreclosures, which is still serious; support for small banks so they can lend to their communities; facilitate small business lending; and address the deepening crisis in the commercial mortgage banks. Those are the four obligations we are talking about. It is not unlimited. It is not all for ideas that may be floating around here that have little or no merit. It is specifically the areas in which we all know we need to provide help,” Dodd said.

By a vote of 53-45, the amendment was rejected.  Every Republican present voted for the amendment.  Of Democrats present, 13 voted for the amendment and 43 voted against it (including the most progressive members).  The end result is that the measure went forward without language that would have ended the TARP program and required the debt ceiling to be reduced.