CNBC "The Kudlow Report" - Transcript

Interview

CNBC "The Kudlow Report" Interview With Rep. Jeb Hensarling

Interviewer: Larry Kudlow

Subject: Repayment Of Tarp Funds

Copyright ©2009 by Federal News Service, Inc., Ste. 500, 1000 Vermont Ave, Washington, DC 20005 USA. Federal News Service is a private firm not affiliated with the federal government. No portion of this transcript may be copied, sold or retransmitted without the written authority of Federal News Service, Inc. Copyright is not claimed as to any part of the original work prepared by a United States government officer or employee as a part of that person's official duties. For information on subscribing to the FNS Internet Service at www.fednews.com, please email Carina Nyberg at cnyberg@fednews.com or call 1-202-216-2706.

MR. KUDLOW: Congressman Hensarling, welcome back to the program.

REP. HENSARLING: Thanks, Larry.

MR. KUDLOW: I want to ask you this. You know this announcement today. You've been very much a part of this process in your oversight function. Let me just ask you, will taxpayers see benefits from this TARP or de-TARPing? Are we, the taxpayer, going to get this money? Or is there a slush fund that TARP is going to go into? And might we be threatened with more, you know, TARP usages, more General Motors, more Chryslers, more Boston Globes, who knows what?

REP. HENSARLING: Well, Larry, if we would pass legislation in Congress that I have introduced, then, yes, the taxpayer would win. Unfortunately, under our current TARP statute, once the money comes in and we all high-five each other, the secretary has the ability to send it right out, again with the taxpayer not receiving a benefit.

Listen, we can debate whether or not TARP made sense back in September, but today it is no longer being used for a tool of financial stability. It's not being used as a tool of taxpayer protection. I'm afraid it has morphed into something that simply is a slush fund that advances the administration's political, social and economic agenda, and it needs to be terminated.

MR. KUDLOW: Can you put a cap on that, Congressman? Is there a way to cap on that so that it's used to pay down debt and consequently might benefit the taxpayer?

REP. HENSARLING: Well, absolutely. I've introduced legislation that would do a couple of things. Number one, I'm happy to see that banks that wanted to repay could repay. I can assure you, the taxpayer wants their money back. But you have to do several things in legislation to alter the original TARP statute. Number one, you have to have wind-down so that the 700 billion (dollars), when money comes in actually begins to wind down.

Second of all, under the statute, the secretary has the ability to extend the law. He shouldn't be able to do that. It ought to expire at year's end.

Last but not least, if the institution that wants to pay the money back has been found to be safe and sound by its regulator, then they ought to be able to pay the money back. But Secretary Geithner says, under certain conditions he wouldn't allow that. My bill would say that he has to take the money back and it has to be used for deficit reduction.

MR. KUDLOW: All right.

Source