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Stop TARP before more damage is done

By John Thune, Special to CNN
  • Sen. John Thune says Troubled Asset Relief Program being used unwisely
  • Government racked up staggering deficit of $1.4 trillion over past fiscal year, he writes
  • Senators asked Treasury chief to allow TARP to expire in December
  • Thune says lawmakers will introduce legislation to put halt to spending

Editor's note: Sen. John Thune, a Republican, represents South Dakota.

(CNN) -- For the federal government, this has been the year of spending dangerously.

The danger lies not just in the staggering volume of money being thrown around by the administration and Democrat-controlled Congress. It lies as well in their choices about how that money is being used and their apparent lack of concern that their spending splurge is unsustainable.

Just this past fiscal year alone, which ended in October, the federal government has racked up a staggering deficit of $1.4 trillion, tripling the previous record. And it has done so in part through moves like buying an ownership stake in hundreds of banks, an insurance company, two automakers and numerous other businesses.

A little over a year ago, Congress created the Troubled Asset Relief Program to try to stabilize plummeting financial markets.

But in the name of solving one problem, the Treasury Department created another by getting the government dangerously entangled in the ownership and management of what had been privately run companies and industries.

TARP is not the only problem, but it rests at the intersection where excessive government spending meets risky decisions.

The government has used its position to dictate how much executives of those companies will be paid, and there is a risk that it will influence what products will and won't be produced. This kind of arbitrary involvement is perilous in a free-market economy, and it raises serious red flags about the potential for greater abuse.

That's been the unintended consequence of the TARP legislation. It was designed as a focused response to an emergency. But that original purpose was turned on its head as the funds have been treated as ready cash to finance pet projects far beyond the intended scope of TARP.

Not even counting the billions used to bail out General Motors and Chrysler, we've seen proposals to send some of the money to local governments that made investments that went bad and to help pay for highway projects.

All of that cash comes in the form of debt that Democrats will pass on to our children to pay for a political agenda today.

In response to this situation, in September I wrote, along with 39 of my Senate colleagues, to Treasury Secretary Tim Geithner to urge that he allow the TARP program to expire on December 31 of this year.

Since sending that letter two months ago, we have not heard anything from the administration in response.

So with the end of the year fast approaching, several of my colleagues and I are introducing legislation to compel the Treasury Department to do what we had asked them to do voluntarily: put a halt to TARP spending.

This would help put the brakes on the government's unprecedented spending spree and take away the temptation to get further involved in buying up private companies. It would also be a vital first step in untangling the government from the marketplace and all of the conflicts of interest that government creates by declaring who wins and who loses.

That kind of government control over private business is not what made our nation great, and it will not help us restore America's economy today.

As things stand today under TARP, the Treasury Department has the authority to spend just over $300 billion more on projects of its choosing. Our bill would take away that authority and protect taxpayer money from being wasted. It's clear that ending this one program will not, by itself, undo all of the damage, but it's an important first step.

When I talk with my constituents in South Dakota, they do not mince words in expressing their anger and their concern about the amount of control the federal government has been exerting and the amount of debt it is running up in the process.

Calling off TARP is one concrete thing we can do to reassure the American people that we understand their concern, we share it, and we are ready to do something about it.

It is time to shut down the government slush fund that TARP has become.

The opinions expressed in this commentary are solely those of John Thune.