WASHINGTON The governments giant bank bailout may well have averted a second Great Depression, economists say, but a lot of voters arent buying it. Support for the program is turning into a kiss of death for many in Congress.
Longtime Republican lawmakers tarred by their votes for the emergency aid to banks, insurance and auto companies have been sent packing in primaries. Fresh political attack ads are lambasting candidates from both parties for supporting the $700 billion package that Republican President George W. Bush pushed through Congress at the height of the financial crisis in October 2008.
The actual cost to taxpayers will be far less than the original price tag, perhaps totaling $50 billion or less. But its been difficult for lawmakers to make the case that they saved the nation from possible financial ruin as some economists suggest. Its far easier for opponents, especially in political soundbites, to portray the issue as Wall Street fat cats against ordinary Main Street folks in the final-weeks cacophony of the campaign.
President Barack Obama and congressional Democrats, now in charge, have taken heat for a program that many voters see as proof that the rich guys were bailed out while the public wasnt. Indeed, both parties are on the attack.
Some recent examples:
b In Missouri, Democratic Senate candidate Robin Carnahan has been savaging Republican Rep. Roy Blunt for helping push the Toxic Asset Relief Program, or TARP, through Congress. One ad calls him Mister Bailout. Another one, paid for by the Democratic Senatorial Campaign Committee, asserts: When our economy collapsed, Washington is where Roy Blunt took the lead and voted for the $700 billion Wall Street bailout.
b In Connecticut, Senate candidate Dick Blumenthal hit Republican Linda McMahon during their debate Monday night for signaling support for TARP. She has called it a necessary thing to do at the time. He says he opposes it.
b The U.S. Chamber of Commerce, the nations most powerful business lobby, is spending millions on ads trying to elect candidates who oppose the TARP bailout and last years $814 billion stimulus package even though the chamber supported both programs at the time.
b Rep. Chet Edwards, D-Texas, admits hes vulnerable because of his TARP vote. It may cost me votes. It may cost me an election, Edwards said. But it was the right thing to do.
b Some Republicans who supported the package have already been cast aside: Sen. Lisa Murkowski of Alaska and Rep. Mike Castle of Delaware were defeated in GOP primaries. Republican Sen. Robert Bennett of Utah was rejected at a GOP convention, where fellow Republicans taunted him with chants of TARP, TARP.
And Democratic Sen. Blanche Lincoln of Arkansas came close to losing the Democratic nomination for re-election in part because of her support for the bailout.
She was among the 67 senators who voted for TARP in 2008.
Candidates, particularly those with ties to the tea party movement, have railed against what they see as a bailout nation.
TARP officially ended Sunday when the government lost its authority to tap remaining funds. However, it is still possible for the Treasury to add to any program that was in place as of last June 25.
Despite the political venom, the program has turned out to be far less expensive than the original $700 billion price tag.
As of Sept. 30, the government has spent $388 billion of the $700 billion, and $204 billion of that has been repaid, the Treasury Department said Tuesday in a Two-Year Retrospective of the program.