Washington, DC – Today, Congresswoman Jane Harman (D-Venice) voted to disapprove release of the second $350 billion of the Troubled Asset Relief Program (TARP). Because the Senate has approved release, the funds will be made available. But the House voted to disapprove by a margin of 270 to 155. Harman’s floor statement is attached. 

Today I voted to disapprove the release of the second half of the so-called TARP funds.  The Senate has already approved the release, so mine is essentially a protest vote.  But it is a protest that should be heard.

 The Bush Administration presented the $700 billion Troubled Asset Relief Program to Congress as an asset purchase program.  We were told that the Treasury Department would use the funds primarily to purchase mortgage-backed securities and other toxic assets, and then banks and credit unions would use their cleaned-up balance sheets to free up credit while the government helped renegotiate home mortgages.  The focus was supposed to be about keeping people in their homes.

 But looking back, it feels more like a classic bait and switch.  Rather than spend the money as promised, the Bush Administration took advantage of loopholes in the law to funnel money directly to banks, who have been loathe to part with it.  And the Bush Administration did this with scant oversight or accountability.  We still have little idea how the first $350 billion was spent, or whether much of it made any difference.

What is clear is that little of the funds went to the small banks and credit unions that actually keep our communities growing.  I understand that only one bank holding company in my district, out of dozens of struggling community banks and credit unions, has received any help under the TARP!

The TARP has essentially become a $350 billion bank consolidation fund.  And in the meantime, the key driver behind this crisis – home foreclosures – has been all but ignored.

My constituents have noticed, and they continue to express overwhelming disapproval of the way the program has been run thus far.

Yesterday, I voted for HR 384, Chairman Frank’s TARP Reform and Accountability Act, which I believe would have made vital changes to the TARP – including the adoption of a home foreclosure program modeled after the one proposed by FDIC Chair Sheila Bair. 

But I understand that the Senate has no plans to take up the Frank Bill, and instead will rely on assurances from NEC Chairman Larry Summers that the Obama Administration will use the second $350 billion responsibly. 

Larry Summers is a friend and an enormous talent, and I have great respect for President Obama and his team.  But Congress is the constitutionally designated steward of taxpayer dollars.  We should insist on the limitations in the Frank bill before releasing another $350 billion.

I expect to support a robust and effective stimulus bill.  I wish the second tranche of TARP had been totally revamped and added to the stimulus proposal.

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Max Weihe

Press Assistant

Congresswoman Jane Harman

2400 Rayburn HOB

Washington, DC 20515

202-225-2156 (Direct)

202-225-3275 (Cell)

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