TARP One Year Later: Bennett Says Bill Succeeded in Preventing Financial Collapse and Keeping Businesses Open

October 1, 2009 -- WASHINGTON, D.C. - Senator Bob Bennett (R-Utah), a member of the Senate Banking Committee, issued the following statement today regarding the passage of the Emergency Stabilization Act, which created the Troubled Asset Relief Program one year ago:

"Today is the anniversary of one of the most difficult votes I've ever had to cast as a senator: the vote to authorize TARP to stabilize the financial system, not only here, but around the world.

Article continues below...

"I'm a businessman; I came to Washington bringing a businessman's perspective. I wanted to find out how this bill was going to affect business, not just around the world, but specifically in Utah. I got on the phone with a number of Utah businesses- not only banks, but the cattleman and car dealers and people all over the state -- and asked, ‘How important is this to you?' They told me-which I understood, also as a businessman - that if they didn't have access to credit, the whole system would break down. Many said that they would have to reduce their workforce and some would have to shut their doors completely. They said it was essential that the credit system continue to function. And so, understanding how important it was to our nation's economy and the people in Utah, I voted for TARP.

"And looking back on it, every economist I've talked to- conservative and liberal all across the spectrum- has said we had to do it, because without it, our country would have faced a financial meltdown costing us substantially more in the end. TARP prevented the financial system from collapsing.

"But I did what I could to make sure that we did not immediately push $700 billion out the door. I was part of the group that successfully urged that we cut that number in half. In an effort to protect the taxpayer, I wanted us to spend only $350 billion and see how it worked before authorizing the rest of the money. When I monitored the effects of that first round of money, I felt that the crisis had passed. I did not believe the administration made the case that the emergency was still present when requesting the remaining $350 billion, so I voted against the second $350 billion. The administration was not spending the money the same way it promised to spend the first $350 billion; it was not being used to see to it that credit would be available to small business.

"The reality is that a free market cannot function if it does not have access to credit, so I think we did the right thing by passing the initial round of TARP, making credit available. We're seeing many of those companies to whom the credit was made available start to pay it back. Approximately $80 billion of taxpayer money has been returned including interest. I hope we continue to see the return on our investment.

"We did the right thing one year ago but, looking ahead, we don't need more such money going out of the Treasury. We need the right kind of tax and regulatory regime that will allow businesses to solve the problem themselves, making America stronger long-term. That's what I learned as a businessman and that's what I still believe as a senator."

Click here to view a TARP fact sheet including information regarding the amount of money that has been returned.

Source: Senator Bob Bennett