Financial Reform Bill to use TARP Money

MyBankTracker.com
Jul. 01, 2010

Forced to remove a lucrative bank tax from its sweeping financial reform bill, U.S. Congress is turning to the Troubled Asset Relief Plan to help fund the new financial regulations.

Reuters reported this week that U.S. lawmakers, who could not come to an agreement on whether to include a bank tax that would generate an estimated $17.9 billion, decided instead to pull money from a pool created as part of the TARP bailout fund. Pulling money from the TARP fund would give the government $11 billion to help cover the costs of instituting the sweeping financial reform it agreed upon.

Taking From TARP not Necessarily a Popular Option

Lawmakers on either side of the political spectrum were less than pleased with the decision to draw funds from TARP to cover cost of restructuring.

Some Republicans claimed taking from the TARP fund was essentially using taxpayer money to fund the initiative and that any contribution from TARP would raise the nation's budget deficit.

Some Democrats countered by saying they did not want the new plan but had to settle on it because of Republicans' hesitance to embrace a full-fledged bank tax.

Continued