Herseth Sandlin: Take TARP out of Treasury

SIOUX FALLS, S.D. (AP) — South Dakota’s Stephanie Herseth Sandlin is among three U.S. House Democrats who have signed onto a bill to take the Troubled Asset Relief Program out of the Treasury Department.

Ten Republicans have signed onto the bill, including House Minority Leader John Boehner, R-Ohio.

Herseth Sandlin, who originally voted against TARP, said she thinks the government should decrease its role in buying stakes in failing companies.

If the bill becomes law, the Treasury Department would have to transfer TARP to a three-member board of trustees appointed by the president.

The board would have to liquidate its assets by Dec. 24, 2011, unless it told Congress that selling those assets would hurt taxpayers. Congress then would have to approve the continuation of TARP under the board of trustees.

The bill would apply to any business in which the government’s ownership stake amounted to 15 percent or greater and would include companies such Citigroup, General Motors and American International Group.

Herseth Sandlin said the board would remove TARP from the political whims of Congress and the president.

The program was created last fall to try to stabilize banks and other financial institutions, originally to buy bad assets. But it expanded under the Treasury Department, and funds have been used to buy ownership stakes in companies.

Some have credited TARP with staving off a bigger financial downfall, but Herseth Sandlin said she has doubts. Some parts of TARP might have helped, “But yet, have we gotten to the core of why the freefall happened? In my opinion, no,” she said.

The $700 billion program is scheduled to end Dec. 31, but the Treasury secretary can extend it. Herseth Sandlin, a leader of the fiscally conservative Blue Dog Democrats, said Thursday she opposes any extension.

Herseth Sandlin said that under her approach, the trustees could sell assets at a higher value, benefiting taxpayers.

“It’s good to see that Herseth Sandlin is finally starting to pay attention and is waking up to the reality that this is an issue that must be addressed,” said Lucas Lentsch, executive director of the South Dakota Republican Party.

Republican Sen. John Thune “has been leading the way on this for months,” Lentsch said.

Thune has called for the end of TARP.

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