The Democratic candidate for United States Senate has made criticism of the 2008 financial rescue package a center-piece of her campaign, even as the incumbent Democratic senator defends it.
It was called TARP, the $700 billion Troubled Asset Relief Program pushed through Congress to keep the financial sector from collapsing. Democrat Robin Carnahan says she would have voted against it. Fellow Democrat, Senator McCaskill, supported it.
“So, I believe I can explain my vote on TARP and why I did it and I will continue to defend my vote,” McCaskill says. “That doesn’t that I don’t think that Robin Carnahan is the better choice for United States Senate.”
The disagreement between McCaskill and Carnahan brings into sharp focus the political problem that is TARP. President Bush, a Republican, pushed for passage of the Emergency Stabilization Act in late 2008 in consultation with the incoming Obama Administration. Congress, controlled by Democrats, approved the bill that created TARP.
Congress originally intended TARP to buy up so-called “toxic assets” from bank balance sheets, to rid the banks of the mortgage-related assets that had become dead weight. That didn’t happen. Treasury Secretary Hank Paulson in November announced that TARP funds wouldn’t be used to help banks dump those assets, but would be used as a loan fund. The Federal Reserve Bank reports nine large financial institutions borrowed $125 billion of the initial $250 billion made available by the Treasury Department. Then, in December Treasury authorized loans of up to $13.4 billion for General Motors and $4 billion for Chrysler from TARP.
McCaskill says TARP did what it was supposed to do; it kept the financial markets from collapsing. She adds much of the money has been paid back. A report released by the research firm Keefe, Bruyette, & Woods disclosed that 61 banks have repaid their debt, with interest, netting the federal government $13 billion.
McCaskill says Carnahan has gone after Blunt, because Blunt has run from his record as the Republican in the United States House that helped secure the votes for its passage. Blunt helped majority Democrats lure the votes needed to pass TARP in the US House.
“So, I get why she’s criticizing him on TARP,” McCaskill says, “as to whether or not that should have passed, she and I disagree on that.”