One of the great misconceptions concerning our current national debt is the Obama Whitehouse inclusion of TARP Funds into national debt total. While this is somewhat justified, they have consistently misled the public using the billions of TARP dollars as an example of the previous administrations excesses. They use both TARP and Stimulus to blame former President Bush for the national debt they are increasing.
The major difference between TARP and Stimulus funding is the majority of TARP funds ‘must be paid back’ to the taxpayers. The money is ‘required by law’ to be used to ‘pay off’ the national debt. The Obama Whitehouse intends to use the TARP repayments for other funding thus breaking the law and maintaining a debt President Bush never intended.
This was pointed out Yesterday during a somewhat heated exchange between Senator Judd Gregg and Whitehouse Budget Director Peter Orszag when Orszag suggested the TARP funds could be used to provide credit to small business. Senator Gregg schooled Orszag on the details of the law.
“This is the law,” he said. “Let me tell you what the law says. Let me read to you again because you don’t appear to understand the law. The law is very clear. The monies recouped from the TARP shall be paid into the general fund of the Treasury for the reduction of the public debt. It’s not for a piggy bank because you’re concerned about lending to small businesses and you want to get a political event when you go out and make a speech in Nashua, N.H.”
As a Senator Obama voted yes on TARP funding. As a President he signed Stimulus into law. If he abuses the TARP law and spends the monies recouped in lieu of paying down the national debt, he should take the full blame for all the national debt increases.