Reiterating once again his commitment to small business as the engine of our economy, the President urges Congress to move forward immediately on steps to help them expand and create jobs. These proposals include using $30 billion in TARP funds to create a new Small Business Lending Fund to provide capital to community banks to increase lending to small businesses, offering a new tax credit for over one million small businesses that hire new workers or raise wages, and providing targeted support for the most innovative small businesses with the potential to export new goods and products.
Category Archives: TARP
White House Blog– Today the President spoke in the East Room of the White House, bearing good news for the taxpayer. The President’s intention was to discuss all of the progress already underway on the fiscal responsibility front, from ending the kind of wasteful no-bid contracting we have all come to know, to cutting unnecessary programs, to eliminating subsidies lavished on health insurance companies through Medicare.
But as it happened, there was even more good news before he discussed those issues:
THE PRESIDENT: Thank you. Thank you all for joining us here in the White House. Before I begin, I want to comment briefly on the announcement by the Treasury Department with regard to the financial stability plan.
As you know, through this plan and its predecessor, taxpayer dollars were used to stabilize the financial system at a time of extraordinary stress. And these funds were also meant to be an investment — and they were meant to be temporary. And that’s why this morning’s announcement is important.
Several financial institutions are set to pay back $68 billion to taxpayers. And while we know that we will not escape the worst financial crisis in decades without some losses to taxpayers, it’s worth noting that in the first round of repayments from these companies the government has actually turned a profit.
This is not a sign that our troubles are over — far from it. The financial crisis this administration inherited is still creating painful challenges for businesses and families alike. And I think everybody sees it in their own individual districts. But it is a positive sign. We’re seeing an initial return on a few of these investments. We’re restoring funds to the Treasury where they’ll be available to safeguard against continuing risks to financial stability. 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.
I’ve said repeatedly that I have no interest in managing the banking system — or, for that matter, running auto companies or other private institutions. So today’s announcement is welcome news to me. But I also want to say the return of these funds does not provide forgiveness for past excesses or permission for future misdeeds. It’s critical that as our country emerges from this period of crisis, that we learn its lessons; that those who seek reward do not take reckless risk; that short-term gains are not pursued without regard for long-term consequences.
Yet another sign that the worst may be over and the economy is on the rebound, JPMorgan has posted a profit for the first quarter of $2.1 billion.
New York Times News Alert –
Goldman Sachs confirmed on Monday that it would raise $5 billion through a stock offering to help pay back government rescue funds, as it posted a $1.8 billion profit for its first quarter.
In a statement, Goldman said: “After the completion of the stress assessment, if permitted by our supervisors and if supported by the results of the stress assessment, Goldman Sachs would like to use the capital raised plus additional resources to redeem all of the TARP capital.”
U.S. Senator Robert Menendez (D-NJ), a member of the Banking Committee released the following statement on bonuses paid out by AIG, the insurance giant that also has benefited from a government rescue plan:
“These bonuses are an insult to families who are trying to survive the economic crisis by saving every penny and changing their way of life. They have every right to be furious that AIG is taking their tax dollars while carrying on with what can only be described as business as usual – particularly when business as usual helped put us in this mess.
“President Obama is right to have his administration search every legal means available to try to block these bonuses, and I will help push similar efforts in the Senate. The question must be asked: If unions can be expected to renegotiate contracts to help save companies or industries, then why can’t companies do the same with their executives during this crisis?
“We have to make sure that Wall Street is using taxpayer money in a responsible manner. Perhaps equally as important, we have to make sure that some on Wall Street don’t further erode the confidence of the American people by failing to recognize the need for shared sacrifice. There is a fundamental and troubling disconnect between the realities that families across this country are living through and how some on Wall Street are acting like there is no crisis.”
Senator Menendez also appeared yesterday afternoon on the MSNBC program “1600 Pennsylvania Avenue” with host David Shuster to discuss his feelings on the AIG bonuses.
SEN. MENENDEZ URGES OBAMA ADMINISTRATION TO INVESTIGATE DEFERRED BONUSES BY BANKS RECEIVING TAXPAYER MONEY
Press Release – Economic recovery plan provision banning bonuses for TARP recipients may also apply to deferred bonuses
Tuesday, March 3, 2009
WASHINGTON – In order to ensure that taxpayer money is not being used to pay Wall Street bonuses, U.S. Senator Robert Menendez (D-NJ), a member of the Banking Committee, today urged the Obama administration to examine recent reports of bank executive bonus deferrals and other creatively-titled reward payments. In his letter to Treasury Secretary Timothy Geithner, Senator Menendez is specifically interested in determining if these bonuses are legal – the economic recovery package included language prohibiting bonuses, which seemingly also prohibits deferred bonuses and other similar payments.
In his letter, Senator Menendez wrote: “The intent of Congress on behalf of the American people was to use TARP funds to free up lending, prevent foreclosures, and stimulate the economy. If used correctly, they will help students pay for college, families get auto loans, homeowners modify mortgages, and small businesses stay open and keep their employees on the payroll. On the other hand, if the money is used for the personal comfort and financial well-being of executives, then this rescue package will be transformed into merely a give-away to banks, to the detriment of taxpayers.”
>Member of Banking and Finance Committees asks President Obama to require that Chrysler repay TARP loan should Fiat take majority ownership
WASHINGTON – U.S. Senator Robert Menendez (D-NJ) today asked President Barack Obama to institute a policy to prevent auto company rescue funds from going to foreign auto companies. With Italian carmaker Fiat in a deal to purchase 35 percent of Chrysler and with news reports citing the possibility that it could eventually own up to 55 percent of Chrysler, Senator Menendez is asking that Chrysler be required to pay back loans from the Troubled Asset Relief Program should Fiat become the majority owner of the company.
Read Senator Menendez’s letter to President Obama>>>HERE