Restoring American Financial Stability Act of 2010--Continued

Floor Speech

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Mr. BENNET. Mr. President, I will reserve 2 minutes for Senator Tester out of my time.

As I mentioned earlier this week, we have an important opportunity to safeguard our economy from the conditions that drove our country into this catastrophic financial meltdown.

The Wall Street reform bill we have before us takes critically important steps forward, helping to stabilize and safeguard our financial institutions, our financial system for consumers and businesses alike. But we should not stop here. This debate must be about making the underlying bill better.

I rise today to suggest one substantial way that we can rebuild the credibility of our financial system, save taxpayers billions of dollars, and finally move to end the TARP.

Mr. President, I have an amendment at the desk, No. 3928, and I wish to call it up and ask unanimous consent to add Senator Brown of Massachusetts as a cosponsor.

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Mr. BENNET. Mr. President, my amendment is based on bipartisan legislation I introduced earlier this Congress called the Pay It Back Act. I was greatly encouraged at that time by the broad bipartisan support in this body for winding down the TARP, getting serious about deficit reduction, and spurring our economy back to health.

As I talk with Coloradans all across my State, I hear the same concerns again and again. People are deeply concerned and worried about the economy. They worry about jobs and they worry about our rising Federal deficit. But mostly they just want a fair shake--a chance to achieve their own vision of success through hard work.

That is why they don't understand the behavior of some of our largest financial institutions. They don't understand how these behemoths could have made bad bets, lose billions of dollars, and then be bailed out by the Federal Government. That doesn't make sense to most people in Colorado, and it certainly doesn't make sense to anybody running a business.

This pay it back amendment takes a big step forward in our efforts to wind down and eventually end the TARP. It prevents further government spending, recaptures taxpayers' investments in financial institutions, and ensures that repaid funds are used for deficit reduction.

It does this in a couple of ways. First, it reduces the TARP's authority by about $150 billion, which will ensure that unused TARP funds are not used for new government spending.

Chairman Dodd's bill sends a strong message to Wall Street and our broader markets that there is no longer an implicit guarantee of government support for excessive and sloppy risk taking. This amendment reinforces this important principle by reducing TARP's authority. In short, it begins to wind down the TARP and ensures that the government doesn't use the excess funding for new spending initiatives. It is a commonsense way forward for a program whose time has come and thankfully is almost gone.

But that is not enough. As we wind down TARP, we need to make sure that taxpayers realize a fair return on their investment. That is why the second element of the Pay It Back Act amendment is that it takes captured, repaid TARP funds and applies them to deficit reduction. It does it by severely restricting TARP's revolving door of credit.

Although some companies have already repaid the money they received, TARP currently allows the Treasury to keep $700 billion ``outstanding at any one time.''

Let me make this clear. The Treasury has already received about $180 billion in repaid funds from banks that are now in a position to repay the taxpayers. But right now, Treasury can turn around and lend that same money to some other financial institution. It can use our money again and again. And since the TARP money is borrowed against our kids' and grandkids' futures, that is using their money again and again and again. I can tell you for sure that my daughters don't want to be stuck footing the bill for keeping the TARP around even 1 day longer than we have to. By supporting my amendment, this body can move forcefully toward ending the TARP and restoring fiscal sanity.

The amendment also creates a sunset for unused Recovery Act funds. Any funds not obligated by the Federal Government by December 31, 2012, will be returned to the Treasury to pay down the national deficit. Congress passed the Recovery Act to jolt our struggling economy back to life and help create and save jobs now. Yet, if funds have not been used by the end of 2012, can we say they have been used to ease our current recession? The taxpayers deserve to see stimulus funds used for real stimulus. If not, they should be used to pay down our debt.

The pay it back amendment sets a schedule for getting the government out of the business of owning businesses. It lets excessive risk takers know that Washington no longer provides a backstop for greed, overleveraging, reckless levels of risk, and irresponsibility. If big financial institutions want to behave that way, they must know that they do so without the TARP--without money from Main Street--to bail them out any longer.

In short, it is time for this assistance to come to a responsible end. At the heart of the Wall Street reform bill is an effort to prevent future bailouts. So let's start by finally winding down the biggest bailout of them all and making sure taxpayers get the best possible return on their money.

I thank my colleagues who are cosponsors of the bill, and I ask all of my colleagues to support this important amendment. I thank Senator Dodd and Senator Lincoln and the ranking members of the Banking and Agriculture Committees for their hard work to bring Wall Street reform to the floor.

I know the Senator from Montana wants to take a couple of minutes. I will say this. Americans have been watching the news in Europe this week, and they are seeing what is happening in Greece and the rest of Europe. If we don't think that is a canary in the coal mine, we do that at our peril. This bill will not solve our deficit and debt problem, but it takes a stand that says we are not going to leave a legacy of $12 trillion behind for our kids and grandkids.

With that, I yield the floor.

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