After Thursday’s job summit, the White House is considering using leftover funds from the financial bailout to help boost job creation. Rep. Paul Ryan (R., Wis.), the ranking member of the House Budget Committee, tells NRO that such a plan would be foolhardy. “President Obama is trying to apply ‘Cash for Clunkers’ to the entire American economy,” he says.
Such a policy would “just be cosmetic and political marketing,” says Ryan. “Economic actors see through the spin. There’s no need to deploy this kind of capital. If people can borrow, they are doing it. Instead of ladling T.A.R.P. funds, the president should be trying to lower taxes.” The administration, he says, is “desperately trying to pull future economic growth into the present.”
“We’re going to see modest, positive growth for the fourth quarter, but next year we’ll probably see another slowdown,” says Ryan. “Spending more money is not going to solve the administration’s problems.” The bailout funds, Ryan adds, should go back to the Treasury to help reduce the deficit.
UPDATE I (h/t Dan Foster): From the Washington Post:
President Obama is likely to endorse using a portion of the government’s $700 billion financial bailout for a new jobs creation program during a speech about the economy next week, Press Secretary Robert Gibbs told reporters Friday morning.
“The president thinks we should and must do everything in our power to create an environment for job growth and job creation,” Gibbs said. When asked whether Obama will talk about the use of TARP funds on Tuesday, Gibbs said, “I think that’s likely.”
About $139 billion of the Troubled Assets Relief Program, or TARP, remains unallocated and available to the administration.
UPDATE II: From Republican Whip Eric Cantor (R., Va.):
TARP funds borrowed from the taxpayer should not become a slush fund for the political whims of Washington. The TARP was passed last fall because most experts believed that our capital markets were on the verge of absolute collapse. It was an action that no one really wanted to take, but it was an extraordinary amount of money that was passed because this country was in an economic emergency.
The President and Speaker Pelosi need to recognize that TARP money was borrowed from the taxpayer to deal with a dire emergency, and now it must be returned. In fact, current law states that returned TARP funds are to be used to reduce the debt – not more spending preferred by the President. This country is in debt, and the only responsible action is to pay it down, not preserve and expand it.