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Gill wants you to parse McNerney’s TARP votes

By Josh Richman
Thursday, September 20th, 2012 at 12:21 pm in 2012 Congressional Election, Jerry McNerney, U.S. House.

The campaign of Lodi Republican Ricky Gill – who’s taking on Rep. Jerry McNerney, D-Stockton, in the newly drawn 9th Congressional District – is up in arms about a claim made in pro-McNerney mailers sent out by the California Democratic Party.

Two CDP mailers, aiming to paint McNerney as a fiscal conservative, say he voted “NO to a $350 billion bailout because McNerney believes in responsible spending.”

But Gill’s campaign notes that the January 2009 vote to which that refers – on releasing the second half of the $700 billion for the Troubled Asset Relief Program – was meaningless. As FactCheck.org explained two years ago:

As the law was structured, the treasury secretary (then Henry Paulson) had access to only $350 billion, half of the total package, at first. The second half would be available only if the administration went to Congress and asked for it. Treasury would get the money unless Congress said no. The first $350 billion of the TARP money was quickly spent.

By the time the Bush administration, at the request of President-elect Barack Obama, filed a request with the Senate for the rest of the money on Jan. 12, 2009, there were widespread complaints that too much of the first tranche had been used to bail out large institutions and not enough to help homeowners. The new funds could have been blocked had both houses of Congress voted to do so, but on Jan. 15, 2009, the Senate defeated a disapproval resolution, 52-42, effectively voting to release the funds. Treasury almost immediately announced it would use some of the money to shore up a deeply crippled Bank of America.

Where was the House in all this? Pretty much irrelevant. Eventually there was a similar vote in that body. … [I]t passed, 270-155. But the vote came on Jan. 22, a week after the Senate’s vote (and two days after Obama was sworn in). Treasury already had the money.

So the House vote was purely symbolic.

“The Democrats’ claim is doubly misleading because McNerney voted for TARP in the first place,” Gill spokesman Colin Hunter said in an email.

True, too – though it might be worth noting that the law creating TARP was proposed and signed by President George W. Bush, and approved by Congress with bipartisan support (including Speaker John Boehner, R-Ohio, and 90 other House Republicans). And also that TARP both worked and cost the taxpayers less than expected, according to the nonpartisan Congressional Budget Office.

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  • JohnW

    Bottom line is that McNerney voted for TARP when it mattered, and Ricky says he would have voted against it. McNerney, Pelosi and Obama helped Paulson and Bush get it done. Ricky would have preferred a Great Depression.

  • Elwood

    @ 1

    Absurd.

  • JohnW

    Absurd? How’s that?

    Just saying that, for those of us who agreed with economists that failure to pass Paulson/Bush’s TARP would have resulted in a total collapse, McNerney/Pelosi/Obama did the right thing when everything was on the line. Taken at his word, Ricky would have done the wrong thing.

    If you don’t agree with that view of what would have happened without TARP, then your take on McNerney/Pelosi/Obama is different.

  • Chariot LLC

    If McNerney thinks the bailouts worked, then why is McNerney trying to make voters think he opposed the bailouts? Like everything else with this Congressman, he can’t get his own truth straight.

  • Elwood

    @ 3

    It sure is.

  • Elwood

    OBAMA’S ECONOMY STILL SUCKS

    “Applications for unemployment benefits have shown little movement since early spring, suggesting a continuation of lackluster job creation. The U.S. has barely added enough jobs over the past six months to keep up with growth in the working-age population.”

    http://www.marketwatch.com/story/us-jobless-claims-show-little-improvement-2012-09-20

  • JohnW

    @ #4 Chariot LLC

    Well, it did work. Money was repaid, and the U.S. just made $15 billion profit selling the shares in AIG that it took in exchange for the emergency infusion of capital.

    At the time, George Bush stated, “I’ve abandoned free-market principles to save the free-market system.” It was a Paulson/Bush deal, but it was the Dems who stepped up and took the heat for voting for TARP, after Paulson literally got on his knees and begged Pelosi. Bohener couldn’t get the votes on his side.

    The financial system was in a total freeze-up. The banks couldn’t do their over-night lending to each other. Banks, in turn, couldn’t do the daily short-term lending that they provide to companies to buy inventory and meet payroll. GE was on the ropes because of its heavy dependence on this type of short-term financing. Money market funds were about to implode. We would have reached a point where you wouldn’t be able to get money from your ATM or redeem bonds. 401k’s and other retirement funds were in jeopardy. Good luck with your checking and savings accounts.

    Then and now, it was estimated that, without TARP, we would hit peak-Great Depression unemployment of 25%. That would have been 20 million or so more unemployed than what we have currently.

    It wasn’t pretty. More strings should have been attached. But the fear at the time was that, with too many strings, JP Morgan and Wells Fargo would refuse to participate in the re-capitalization of the banks, believing that they would be the survivors to pick up the pieces after all other banks went belly-up.

    This was like Jerry Ford’s pardon of Nixon. Very unpopular but the right thing to do.

  • JohnW

    Re: #6

    It is indeed the “Obama Economy.”

    Considering that the global economy outside the U.S. is contracting, we’re lucky that the domestic economy is performing as well as it is. It would be lots worse without TARP, the stimulus and the auto bailout. What have Republicans proposed or advocated that would make the recovery faster and more robust? Oh, I know. Tax cuts!

  • Elwood

    @8

    John, you believe in fairies and unicorns too, don’t you?

  • JohnW

    Re: #9

    Well, you know Elwood, we liberals believe in that big tent, Plenty of room for fairies and unicorns too.

    I stand by what I said about the economy. Housing seems to be making a bit of a comeback. That and getting through an extended period of people unwinding household debt have always been the keys for a meaningful recovery. Even then, we’re back to a pre-housing bubble economy that has been flat for more than a decade.

    And, to repeat myself, what have Republicans proposed or advocated that would have made the recovery faster and more robust?