Brad Sherman Hammers Treasury: "It's Not Illegal If Wall Street Wants It"

In remarks on the House floor Tuesday, Rep. Brad Sherman (D-Calif.) railed against the Treasury Department's plans to recycle bailout dollars paid back by companies participating in the bailout, aka the Troubled Asset Relief Program. Citing a part of the bailout bill that states that revenue from the sale of troubled assets "shall be paid into the general fund of the Treasury for reduction of the public debt," Sherman said the administration is following a theme: "It's not illegal if Wall Street wants it."

"It is being widely accepted in the press and on Wall Street and in Washington that whatever the [Treasury] Secretary gets back from the banks will instead be part of some revolving fund from which the Secretary of the Treasury may make additional bailouts in addition to the first $700 billion of expenditures," Sherman said. "Well, the statute is very clear to the contrary. Whatever is returned to the Treasury goes into the general fund."

In April, Treasury Secretary Timothy Geithner testified that the the bailout fund would benefit from $25 billion paid back by banks. Over the weekend, a source told the Washington Post that the Treasury expected to recycle $35 billion. In an email to the Huffington Post, a Treasury spokeswoman said that the department was free to re-use principal repaid by firms participating in the TARP's Capital Purchase Program, which invested in preferred stock, not troubled assets.

Sherman mocked the Treasury's distinction, saying the department wants people to think, "These aren't troubled assets. These are happy assets!"

"Troubled asset is defined as any financial instrument that the Secretary... determines the purchase of which is necessary to promote financial stability," Sherman said. "The preferred stock that we are about to sell or that the companies are about to repurchase from us is exactly this defined troubled asset."

Sherman, who voted against the bailout, is hardly a lone crank on this issue. The office of Sen. John Thune (R-S.D.) told the Huffington Post that Treasury is ignoring the clear intent of lawmakers, a sentiment echoed by economist Dean Baker of the Center for Economic and Policy Research. And a spokesman for the Congressional Oversight Panel told the Huffington Post via email on Tuesday that the panel is discussing the matter and may include it in its next report on the bailout.

Get HuffPost Politics On Facebook and Twitter!

Comments

[breakfast]

08:10 AM on 05/13/2009

Wow! An arm of the Executive branch "ignoring the clear intent of lawmakers." How could this be?

The hardest thing in the world to do is to get the government to follow its own laws.

[breakingpoint]

12:21 AM on 05/13/2009

We are being robbed
http://jischinger.wordpress.com/2009/04/23/tarp-money-being-stolen

oh and there's this too
http://jischinger.wordpress.com/2009/04/29/universal-health-care

[rabiddog6708]

08:50 PM on 05/12/2009

Sherman mocked the Treasury's distinction, saying the department wants people to think, "These aren't troubled assets. These are happy assets!"

You really can't make this stuff up. It's like Mr. Rogers speaking on bealf of Wall Street. Oh, won't you be my (wealthy) neighbor?

[Jaidev]

08:49 PM on 05/12/2009

The truth in all of this is no matter who says what, Nobody truly knows what's going on with the banks other than the Bankers and CEO's of the Banks. The truth is the same people we hate for this mess we need to get us out of it, it's more or less like giving someone a gun and saying ok I built it now learn it and I won't even look your way. Well, a couple years later when that person chooses to shoot you with it and your looking at the wound wondering what happened, they will be the only ones that could tell you what happened. Cause you decided to back away from something you built and let them learn all about it. That's a bad analogy but I hope you get the point.

[Hope Lives]

11:23 PM on 05/12/2009

God, thank you. This President is doing everything he can to save OUR COUNTRY. Could we give him a year or two? It's indecent to treat him this way after this little time.

[Rule Of Law]

08:11 PM on 05/12/2009

Sherman is the man who stood in Congress when they were being forced to pass the first bailout under Bush and warned us all that Cheney had threatened martial law if the bill wasn't quickly passed. It's amazing he's still able to show up to keep warning us.

[KCFreedom]

11:12 AM on 05/13/2009

I agree. I watched him say great things in the original TARP bailout.

However, when his committee had hearings later with the bank executives, he sucked up to them just like the others on the committee. He actually was embarassing. I dunno. I want to believe in him but....

[Frenbar]

08:00 PM on 05/12/2009

There was once a kingdom in a far off land ruled by a king named Bushama. Bushama was helped to the throne by a wealthy group of land owners led by a man named Paulanke. Once king, Bushama forced all the peasants to give him a portion of their own money, supposedly in order to pay for the running of the country. Bushama then took this money, and "loaned it" to Paulanke, who re-loaned the same money out to the peasants (at a much higher rate and a tidy profit). This virtually risk free loaning scheme wasn't good enough for Paulanke, so he decided to package the "loans" to the peasants, and sell them at an additional profit. Paulanke didn't care what happened with the loans once he sold them and took his profit, so he didn't care about how risk the loans were he made or how many failed.

Lo and Behold, the packaged loans he sold started failing massively. It looked as if Paulanke and his cronies might be stuck for big losses. So, Bushama immediately declared that the country would be destroyed if more money wasn't taken from the peasants and given to Paulanke and his cronies to save their business.

And so it goes.

[HekmabaJuzimax]

09:08 PM on 05/12/2009

Tell me the story again, daddy!

[PSM42]

07:10 PM on 05/12/2009

>Brad Sherman Hammers Treasury: "It's Not Illegal If Wall Street Wants It"
But that's what the Ne. 0c. 0ns said ...

[Tzimisce]

06:59 PM on 05/12/2009

Brad Sherman should run for the Senate... challenge that old crone Dianne Feinstein.

[Rule Of Law]

08:04 PM on 05/12/2009

Dianne "The War Profiteer" Feinstein?

She knows where too many Dem bodies are buried on the whole Iraq war scandal to be really threatened.

[KCFreedom]

05:36 PM on 05/12/2009

This is like a financial circle-jerk. Unfortunately, the golden shower is on us.

[ultracrepidarian]

07:40 PM on 05/12/2009

That's the true meaning of "Trickle Down".

[HekmabaJuzimax]

09:09 PM on 05/12/2009

Boy, am I glad I'm just drinking my own urine out of the toilet.

[mitsie]

04:43 PM on 05/12/2009

Gads, I am so sick of the congressmen trying to get re-elected by making a statement such as this, instead of meeting with the President and the Treasurer to discuss options. I'm sure these people don't have all the info that they have. I'm not happy either, but if they let the banks fail, I wonder what these people would say. It's a no win situation

[deeppeace]

05:00 PM on 05/12/2009

You need to read the whole article. It isn't just a 'statement.' It's an observation that's part of his whole argument. I think the headline misleads.

[Frenbar]

07:45 PM on 05/12/2009

You'd do well to be less sure about what info people have or don't have. You'd be surprised at just how little useful information decision makers possess or base their decisions on.

The 'bailout' money is a mere fraction of the direct transfer of corporate wealth to big banks. All the low interest "loans" of taxpayer money, lines of credit, insurance, are what allow these banks to siphon money from workers to the wealthy.

[Bobrobert]

04:40 PM on 05/12/2009

Depression 09 - the greatest depression the world has ever seen.

roflmao

roflmao

roflmao

Hope everyone has their homes and credit cards paid off - if not you can kiss your butt goodbye!!!

[WalkingMouth]

07:08 PM on 05/12/2009

Thank your for sharing your wealth of knowledge you learned whilst earning your PHD in economics. I will now pay off my credit cards as I value my butt and don't want to kiss it farewell.

Wait a second.....economics professors don't use the term "roflmao!" I've been duped!

[HekmabaJuzimax]

09:11 PM on 05/12/2009

Yes they do. They wrote it on all the essays you handed in.

[JaymJay]

04:37 PM on 05/12/2009

Did any of you that are bashing Rep. Sherman even read the story? He's mocking them. Please pay more attention.

[californiadreamer]

04:34 PM on 05/12/2009

Brad Sherman and Henry Waxman have been my representatives and I am proud of both of them. I wish we had more like them ready to stand up for what is right. I voted for Obama and certainly prefer him to the other choice, but I really believe he is being isolated away from the real opinion swirling around the country by his advisors who only have their eye on the next election. I also believed that Obama had the courage to effectuate real change in this country even if he risked his political future. I feel betrayed by his promises of hope which are being diluted and deflated at every turn. I also believe in this new world of blogs and opinion that more people are informed and are forming their own opinion. It won't be so easy to fool all the people all of the time and far fewer of the people will be fooled some of the time and many more will no longer be fooled at all. I would predict that the economic crisis hits home very powerfully, especially if your home is underwater or in foreclosure . Obama's famous poster with the word HOPE will soon be replaced with the word LIAR.

[EJW342]

04:57 PM on 05/12/2009

I am very proud of Brad Sherman's straight talk on these tricky issues.

I too am becoming more and more disappointed in President Obama's lack of (insert your own) to stand up to the moneyed interests in this country.

Money talks - no hiding it and it will until we demand publicly funded Clean Money elections and end corporate personhood.

[artgurrl]

04:33 PM on 05/12/2009

So as we suspected, the Nixon defence now concludes that Wall Street, most notably Goldman Sachs, is now running our country. Welcome to fascist America. This is the change I voted for, a continuation of the Bush/Paulson policies?

[kkmoney]

05:31 PM on 05/12/2009

the point is that your vote makes no difference, the fascists have been in control since the 1900s

[Rule Of Law]

08:08 PM on 05/12/2009

As one blogger--it may have been Robert Scheer--pointed out;

Fascism implies that the state and the corporate are working together to increase the viability of the State, and that the corporations profit when that happens.

What we really have now, he suggested, was a New Feudalism. The rule by the few of the many for the good only of the few. Think royals vs serfs, and I think it would closer to where this is headed.

[artgurrl]

10:10 PM on 05/12/2009

I think you're right.

[tnfit78]

04:33 PM on 05/12/2009

O.K. Enough with the sound bites from congressmen and women who tell us how bad one entity is or how corrupt another is. WHERE IS THE REAL REFORM LEGISLATION?????