Pay it back, pay off debt

As Congress wrestles with how it wants the financial industry to be regulated going forward, congressmen also are weighing a proposal aimed at taking care of previous business: making sure taxpayers don't get stuck for losses from the Troubled Asset Relief Program, or TARP.

The Senate Finance Committee on Wednesday heard arguments for the president's proposed Financial Crisis Responsibility Fee, which, in present form, would collect $9 billion a year for at least 10 years, primarily from institutions that benefitted the most from TARP. While this idea shouldn't be a substitute for repayment discipline, if it becomes law, Congress should be sure that the fees are used only to pay off debt - not spent on other programs.

Best known as the bank bailout program, TARP was an attempt to slow the nation's financial crisis that reached full bloom in 2008. It gave the U.S. Treasury purchasing power of $700 billion to buy up loads of bad mortgage-backed securities from institutions as a way to create liquidity and unlock the money markets. It's been described by many economists as necessary pain.

The 830 recipients also included auto giants General Motors and Chrysler and some insurance companies.

They're supposed to repay the money with interest. If there are still any taxpayer losses, there's supposed to be a plan in place by 2013 to fix that.

So far, more than $536 billion has been dispersed and $186 billion returned, according to a scorecard (http://bailout.propublica.org/main/list/index) produced by ProPublica, an independent, non-profit news organization that focuses on investigative journalism.

The government is making some profit on repayment terms to compensate taxpayer risk.

Banking firms such as Wells Fargo, Bank of America and JPMorgan Chase have already repaid their billions, with interest. Other companies, such as insurance giant AIG and GM and Chrysler, have a long way to go.

The nonpartisan Congressional Budget Office recently projected that taxpayers will lose about $34 billion of the $82 billion of TARP funds that went to the auto industry.

The government-sponsored mortgage entities, Freddie Mac and Fannie Mae, propped up in a separate bailout, have returned little.

Meanwhile, the national debt approaches $13 trillion. It has increased an average of $4.1 billion per day since September, 2007. Each U.S. citizen's share, if payable now, is about $42,000.

This acceleration of debt simply cannot go on. As part of more responsible fiscal policy, Congress should make sure all TARP funds are repaid sooner than later. No political accounting gimmicks. And insist that any profits or fees go to reducing the massive national debt that hangs heavy over us at this time and into our children's future.