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Dems Want Unspent TARP Funds For Main Street Bailout

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Democrats in Congress want to use unspent TARP funds to support homeowners and struggling workers, according to The Hill.

More than half of the Democrats in the Senate want to use the remaining money to provide small businesses with easier access to credit. Rep. Barney Frank (D-Mass.) has proposed using $2 billion of it to give aid to homeowners facing foreclosures. Reps. Peter DeFazio (D-Ore.) and Earl Blumenauer (D-Ore.) have proposed using some of the money for infrastructure projects, which they say would lead to more jobs.

A decision to spend the $210 billion in unused TARP money on a bailout for main street would pit congressional Democrats against president Obama, who hopes to use the leftover bank bailout funds to pay down the the nation's deficit, according to a report published last Friday in the Wall Street Journal. The newspaper reports that the Obama administration is under pressure to prove that it's serious about reducing the deficit:

Agreeing not to spend a certain amount of TARP money will enable the White House, in its budget projections, to assume less money out the door and, therefore, less debt issued. The move would also reduce the deficit by an unknown amount since a certain level of spending and borrowing is already factored into estimated future deficits.

According to The Hill, there are some Democrats who are "hopeful" that leftover TARP funds could go toward both deficit reduction and aid for average Americans.