Rep. Scott Garrett (R-N.J.) says the Democrats’ spending proposals are outlandish, and compares them to a Ponzi scheme. (0:34)

 

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Rep. Barney Frank (D-Mass.) admits the government initially did too much to put lower income people into housing, but says the proposed “TARP for Main Street” program will help communities purchase foreclosed homes (0:43).

 

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By Joseph Russell- Talk Radio News Service

Rep. Barney Frank (D-Mass.) introduced the “TARP for Main Street Act of 2009” during a House Financial Services Committee meeting Thursday. The legislation is designed to use money made available under the Troubled Assets Relief Program, to help struggling homeowners and neighborhoods as the economy worsens.

Frank said “the program is one where money is provided to communities to buy-up property that was foreclosed.”

However, committee Republicans said that the program will continue to add to the massive national deficit. They also criticized the plan because it circumvents the appropriation process by taking $6.2 billion directly from the general fund, a procedure they say violates the Constitution.

“There seems to be a competition by Democrats, especially in this committee, who can come up with the most outlandish way to spend tax payer’s dollars,” Rep. Scott Garrett (R-N.J.) said. “The current proposal is to take the TARP program and turn it into something of a Madoff like Ponzi scheme.”

Frank plans to fund “TARP for Main Street” with money that was originally appropriated for bank bailouts. Some $68 billion has been given back by banks who did not need the money. Frank believes the money should be “recycled” and given to struggling homeowners.

TARP originally appropriated $700 billion in emergency bailouts as a measure to stabilize the financial markets.