During yesterday’s Senate Banking committee TARP oversight hearing, Sen. Jim DeMint (R-SC) asked Treasury Secretary Tim Geithner:
So it’s your understanding that you have $700 billion to use permanently as you see fit?
Secretary Geithner replied:
I’m not quite sure ‘permanently’ is right.
So then what is the right word? Does the Obama administration recognize any end or limit to what they can do with their $700 billion TARP slush fund? As the Los Angeles Times reports, California appears next in line for the bailout parade:
“A fiscal meltdown by California . . . would surely destabilize the U.S., if not worldwide, financial markets,” State Treasurer Bill Lockyer wrote in a May 13 appeal to U.S. Treasury Secretary Timothy Geithner.
Lockyer and Schwarzenegger say last fall’s federal bailout legislation gave the Obama administration legal authority to back the state’s loans. Now is the time to exercise that power, they say. Under their plan, the federal government would guarantee private lenders that they would be paid — with taxpayer money from across the country — if California defaults on its loans. The idea is to take the risk out of lending to California so the banks will put up the funds.
“The state’s view is, if they can bail out the auto industry, they can do this for us,” said attorney Robert Feyer of Orrick, Herrington & Sutcliffe, which is advising the state on the matter.
It is far past time to end the bailout mentality. The TARP must end.