TARP Money For Jobs?

Clipped from online.wsj.com

WASHINGTON -- Democrats have begun to hash out how to pay for a mix of unemployment benefits, state aid, tax credits and other incentives they hope will turn around the country's surging unemployment rate.

Funding for the initiatives would come from two sources. For job creation, the principal target would be a pot of more than $150 billion that was set aside last year to bail out the tottering financial system. House Speaker Nancy Pelosi said Thursday that she would like to tap the Troubled Asset Relief Program fund to pay for any "investments that we have in jobs."
Read more at online.wsj.com

Brian Wingfield says:

There is probably no better way for Democrats to solidify Republican opposition than to use the TARP funds for job creation. (Then again, the GOP has been fairly well entrenched against many Democratic initiatives this year.) But this will draw the ire of even moderate Democrats.

TARP was created in October 2008 for the purpose of stabilizing the financial system. Since then--and not just because of the Obama White House's initiatives--it has transmogrified into a variety of rescue efforts for the economy. Maybe this was the best thing to do, maybe it wasn't, but it wasn't TARP's original intent--and that was the fear that many lawmakers had when they approved it.

Treasury Secretary Geithner has the authority to extend TARP until October of next year, and he'll probably do it. No sense in forking over any ammunition to fight an economic downturn prematurely, he'll argue.

But don't expect the Obama administration to hand out cash for everyone who needs a bailout. For one thing, it wouldn't be prudent, as Bush 41 might say. But secondly, TARP is not a slush fund--it's a lending authority. And the idea is for the government to make money on the funds it's lending out. (Or at least most of it.)