A seldom publicized fact about the TARP legislation is that funds returned/recovered by the program are supposed to go toward reducing the federal debt. That seemingly (read: thankfully) would prevent one of President Obama’s State of the Union proposals to give $30 billion already paid back to the program to “community” banks to lend to “small” businesses (both adjectives in quotes to, of course, be defined by the government).
PolitiFact reported on this issue when fact-checking a statement by Sen. Judd Gregg (R-NH). Notably, it mentions how Congress could get around the law’s requirement in the following passage:
But we also talked with budget experts who said that Congress could get around those rules in a number of ways. For example, Congress could rescind the TARP money and then, in a separate action, use it to pay other expenses, said Brian Riedl, lead budget analyst for the conservative Heritage Foundation.
Spending more money on such ideas is only aided by the fact that the House of Representatives recently raised the official federal debt ceiling. Only the sky is the limit these days.