Bennet: Use paybacks of bailout money for reduction of U.S. debt
Money being returned to the federal government from bailed-out banks and car companies should be used to pay down the federal debt, Sen. Michael Bennet, D-Colo., said.
Bennet, Sen. Bob Corker, R-Tenn., and four others are carrying the Pay It Back Act, S. 1683, which Bennet described as “common-sense and straightforward.”
The measure also would require that any money received in the sale or purchase of any obligation acquired from Fannie Mae and Freddie Mac be applied to the national debt.
It also would lower the debt limit by any amounts returned to the U.S. Treasury.
“My effort is designed to make sure politicians don’t forget the obligation to pay down the debt,” Bennet said Wednesday.
President Obama’s budget is silent on his approach of using money repaid to the federal government, Bennet said. Bennet and other supporters of the measure will have to amend the budget on the Senate floor to have it included, he said.
The act includes a provision that would allow the president to redirect the money in the event of an emergency, and it would close the Toxic Asset Relief Program’s $700 billion revolving door of credit, Bennet said. The program allows the Treasury to keep $700 billion “outstanding at any one time,” and the bill would prohibit that practice.
The act also would require that American Recovery and Reinvestment Act funds unused by Dec. 31, 2012, or money that has been rejected or not obligated, would have to be used to pay down the deficit.