Would Ensure Repaid Funds from Bank, Housing, Auto Bailouts Are Used to Pay Down the Debt, Not Fund Further Spending
Says, ‘Washington Needs to Show it's Serious About Reducing the Deficit'
Washington, DC - Michael Bennet, U.S. Senator for Colorado, vowed to keep up the fight to ensure the Senate makes a serious commitment to reducing the deficit by including his bipartisan ‘Pay It Back' Plan in the budget for the coming fiscal year. Bennet's ‘Pay It Back' Plan, which mirrors legislation he introduced at the end of last year, would ensure funds repaid from the bank, housing, and auto bailouts are used to pay down the deficit and reduce the debt, not fund further spending.
Despite calls by Bennet and a bipartisan group of Senators to include the ‘Pay It Back' Plan in the budget for fiscal year 2011 and ensure taxpayers get a fair return on their investment, the Senate Budget Committee this week failed to adopt the bipartisan provision as part of the budget resolution.
In an effort to make good on his word, Bennet today announced his plans to amend the budget resolution to include the ‘Pay It Back' Plan during the full Senate's consideration of the measure, which is expected to take place in the coming weeks.
"Washington needs to show the American people that it's serious about reducing the deficit," said Bennet. "We now have an annual deficit and long-term debt that is cheating our children and constraining their choices. As bailout funds get repaid, we need to ensure they are used to help pay down the deficit, not fund further spending."
Specifically, the ‘Pay It Back' Plan captures funds from taxpayer bailouts and investments in financial institutions and auto companies through the Trouble Asset Relief Program (TARP), taxpayer investments to stabilize Fannie Mae and Freddie Mac, and unused stimulus funds and makes sure that these funds are used to pay down the national debt. It also establishes a sunset for unused stimulus funds.
The Bipartisan Pay It Back Plan would:
- Capture repaid TARP funds, direct them for deficit reduction, and permanently close TARP's $700 billion revolving door of credit;
- Capture investments from the sale of Fannie Mae and Freddie Mac securities and direct them for deficit reduction;
- Require relevant inspectors general and agency secretaries to identify and capture any ARRA funds that have been turned down or unobligated by the federal government and direct them for deficit reduction;
- Ensure that ARRA funds not obligated by the federal government by December 31, 2012, will be returned to the Treasury and used for deficit reduction; and
- Reduce the national debt limit - dollar for dollar - for all money repaid to the Treasury that is encompassed through any provision in this bill.
The Pay It Back Act, introduced last year, does not undermine emergency and recovery efforts. Rather, it sets a schedule for getting the government out of the business of owning businesses. This bill looks at critically open-ended policies - created to weather a real economic disaster - and establishes a responsible ‘exit strategy' that will protect and benefit the American taxpayer.
The Pay It Back Act is cosponsored by Bennet, Corker, Tester, Mark Udall (D-CO), Lamar Alexander (R-TN), Russ Feingold (D-WI), and Johnny Isakson (R-GA).