[Mobties]

Excellent question.

I’ve always felt there was a fast shuffle.

[Toddsterpatriot]

TARP was originally intended to buy poorly performing securities, to get them off the banks books. They changed their minds and used it to buy preferred shares in endangered financial institutions instead.

[cc2k]

The house voted down the original bill. Then it was resurrected in the Senate with about $150 Billion in additional "sweeteners" (buying votes with earmarks, tax breaks for constituencies, etc.) The Senate passed it and the house then passed the Senate version without amendment.

There was about $700 billion in that for buying "troubled assets." Nobody ever figured out how to find the "troubled assets," so that $700 billion became a slush fund. It was used to buy stock in banks, and to give GM and Chrysler "bridge loans" to get them to a bankruptcy court or merger, and for all manner of other spending which actually had nothing to do with "troubled assets." It was a boondoggle, and it never should have passed. Luckilly, the Republicans who voted for it are in leadership positions now, so we'll be able to do it again some time.

Any Congressman or Senator who voted for that should have been primaried and run out of DC at the next opportunity. Unfortunately, people who vote have short memories.

[Liz]

REFERENCE Behind The Real Size of Obama's Wall Street Bailout (more like $14 trillion)
Mother Jones | Dec. 21, 2009 / FR Posted January 04, 2010 by E. Pluribus Unum

A guide to the abbreviations, acronyms, and obscure programs that make up the $14 trillion federal bailout of Wall Street.

The price tag for the Wall Street bailout is often put at $700 billion—the size of the Troubled Assets Relief Program. But TARP is just the best known program in an array of more than 30 overseen by Treasury Department and Federal Reserve that have paid out or put aside money to bail out financial firms and inject money into the markets. To get a sense of the size of the real $14 trillion bailout, see our chart here. Below, a guide to the pieces of the puzzle:

Treasury Department bailout programs (controlled by Rahm Emanuel)

Money Market Mutual Fund: In September 2008, the Treasury announced that it would insure the holdings of publicly offered money market mutual funds. According to the Special Inspector General for the Troubled Asset Relief Program (SIGTARP), these guarantees could have potentially cost the federal government more than $3 trillion [PDF].

Public-Private Investment Fund: This joint Treasury-Federal Reserve program bought toxic assets from banks and brokerages—as much as $5 billion of assets per firm. According to SIGTARP, the government's potential exposure from the PPIF is between $500 million and $1 trillion [PDF].

TARP: As part of the Troubled Asset Relief Program, the Treasury has made loans to or investments more than 750 banks and financial institutions. $650 billion has been paid out (not including HAMP; see below). As of December 21, 2009, $117.5 billion of that has been repaid. Government-sponsored enterprise (GSE) stock purchase: The Treasury has bought $200 million in preferred stock from Fannie Mae and another $200 million from Freddie Mac [PDF] to show that they "will remain viable entities critical to the functioning of the housing and mortgage markets." GSE mortgage-backed securities purchase: Under the Housing and Economic Recovery Act of 2008, the Treasury may buy mortgage-backed securities from Fannie Mae and Freddie Mac. According to SIGTARP, these purchases could cost as much as $314 billion [PDF].

--SNIP--- long read

Federal Reserve bailout programs

Commercial Paper Funding Facility: With the support from the Treasury, the Fed established the CPFF in October 2008 to increase the availability of short-term debt (commercial paper) funding. Up to $1.8 trillion [PDF] was earmarked for the program.

Mortgage-backed securities purchase: In 2009, the Fed earmarked up to $1.25 trillion to buy investments based on home loans.

Term Asset-Backed Securities Loan Facility: TALF provides financing to investors who are buying asset-backed securities. In February 2009, the Fed and Treasury announced an expansion of the program to generate up to $1 trillion in new lending.

Foreign Central Bank Currency Liquidity Swaps: The Fed has provided $755 billion [PDF] for currency liquidity swaps with foreign central banks.

--SNIP--- long read

[Siena Dreaming]

Or is TARP a part of the original Act signed by GW?

Yes, it is and it was $750B. Half was used by Bush...he left the rest to be spend by his successor whether it would be McCain or Obama.

He didn't need the whole thing to staunch the emergency; the fact that such a huge amount was voted through Congress and available to the banking community was enough to reassure and stabilize.

Most of the money has been paid back as Bush promised it would be although he was laughed at at the time.