U.S. Sen. David Vitter today applauded the announcement by the Federal Housing Finance Agency Director Ed DeMarco that he would not permit Fannie Mae and Freddie Mac to use the leftover Troubled Asset Relief Program (TARP) funds to reduce the principle of mortgages because nearly all of the financial benefit comes at the expense of the taxpayer.
"The liberal spenders in Washington have made it clear that want to double down on bailouts to failed programs, but my message is pretty simple -- end the program and pay what's left to our national debt," Vitter said. "The Treasury's housing programs set up through TARP will only benefit mega banks at the expense of the taxpayer, and that's just unacceptable. It is time to recognize that Treasury's housing programs aren't working without further bailouts of banks, so the commonsense thing to do is to end them. Secretary Geithner should return the taxpayer's money today."
Former Special Inspector General for TARP, Neil Barofsky, recently agreed with Senator Vitter's position that these housing related programs were designed as a bailout for the mega banks. Mr. Barofsky said, "you have a housing program that was supposed to spend $50 billion to help struggling homeowners. And as I detail in the book, Geithner admitted to us that it was really more about, in his words, "foaming the runway" for the banks."
In April, Vitter urged Treasury Secretary Timothy Geithner to end the program and return the money. Click here to read Vitter's letter. There is an estimated $41 billion left in the program according to the most recent SIGTARP report.