WASHINGTON — The Senate approved an amendment Tuesday from Sen. Michael Bennet, D-Colo., requiring that the bailout money now being paid back to the federal government by banks and the auto industry be used to pay down the federal debt.
The provision in the Wall Street reform package also shrinks the funds available under the Troubled Asset Relief Program (TARP) from $700 billion to $550 billion. That’s unlikely to pose any difficulty given that the total fund was never dispersed and that banks and other financial institutions have already repaid $180 billion of the rescue.
The amendment, which drew wide Republican support and passed by a voice vote, prevents using the repaid funds for purposes such as efforts to create jobs. A jobs bill passed by the House late last year was funded in part with returned TARP funds, but that bill was never approved by the Senate. Bennet’s amendment essentially kills the possibility of any similar approach.
“This amendment will ensure that paid-back bailout funds will be used to pay down the deficit, so our kids aren’t saddled with a debt Washington is unable to pay,” Bennet said.
