WASHINGTON, D.C. - Senator Bob Bennett (R-Utah) today joined with Senator Lamar Alexander (R-Tenn.) to introduce legislation that would restrict Troubled Asset Relief Program (TARP) funds from being used to support bankrupt auto companies and require the Treasury to distribute to individual taxpayers all of its stock in General Motors (GM) and Chrysler.
"The authorization of TARP funds was clearly intended to target our financial sector and continue the flow of credit during economic distress; it was not intended to fund auto manufacturers," said Bennett. "The $50 billion of taxpayer money that the Treasury used to support GM has effectively nationalized the company."
The Bennett-Alexander legislation, Auto Stock for Every Taxpayer Act, is a combination of two amendments introduced by the senators. The Bennett amendment prohibits TARP funds from being used to support bankrupt auto manufacturers and ensures that the government does not exercise its voting rights as a shareholder in an improper way. Alexander's amendment guarantees that the taxpayer, not the government, ends up with ownership rights of the stocks within one year following the bankruptcy proceedings.
"If the taxpayers own 60 percent of GM shares and eight percent of Chrysler, then the Treasury secretary must be obligated to vote in a way that maximizes the taxpayer's return, rather than making decisions that would advance political policies" added Bennett. "This legislation helps eliminate the conflict of interest by making the Treasury secretary accountable to the taxpayers, the real shareholders."
"The government should not be in the business of deciding what types of automobiles a company should produce and where its headquarters should be located," continued Bennett.
The Auto Stock for Every Taxpayer Act would:
• Prohibit the Treasury from using any more TARP funds to bailout GM or Chrysler;
• Require that the secretary of the Treasury and his designee have an obligation to the American taxpayer (as the trustee) to maximize the return on that investment, so long as the government holds stock in these companies;
• Require that the Treasury distribute its common stock holdings in that company evenly to every American who paid taxes on April 15 within one year after each company emerges from bankruptcy.