In his statement yesterday announcing that 10 banks would be repaying $68 billion in TARP bailout funds, President Obama proudly asserted that the step would reduce the national debt:
“And as this money is returned, we’ll see our national debt lessened by $68 billion — billions of dollars that this generation will not have to borrow and future generations will not have to repay.”
But apparently, he didn’t check with his treasury secretary first. In an op-ed in the New York Times last month, Timothy Geithner said that the returned funds would “free up resources” for new loans “to help support community banks, encourage small-business lending and help repair and restart the securities markets.”
Oops.
Asked about the issue yesterday, White House press spokesman tried to navigate a middle ground, saying “It’s our obvious hope that additional money is not going to have to be used to stabilize banks.”
That’s a good waffle, but far different than either the president’s firm statement that the national debt would be reduced or Geithner’s wish list for recycling TARP funds.
Someone needs to call a meeting to figure out what the plan is here.