WASHINGTON   –  U.S. Rep. Jo Ann Emerson (MO-08) today voted against releasing the second half of funding to the $700 billion Troubled Asset Relief Program (TARP) operated by the U.S. Treasury.  The fund has been criticized for failing to stimulate the lending necessary to thaw U.S. credit markets.

“We ought to be cautious any time we spend or lend taxpayer money.  Right now, we don’t know enough about the first $350 billion of the TARP – whether it is having the effect we intended of increasing lending and stimulating our economy – to proceed with another huge sum of money.  The TARP was purposefully set up to keep a complicated banking system up and operating.  We need a sound assessment of the first $350 billion before we spend the next $350 billion,” Emerson said.  “I don’t know why we are in a hurry to lend more money to banks at this precise point in our economic downturn if all they are going to do is sit on it.”                       

Federal Reserve officials have also suggested that the $700 billion size of the TARP may need to be expanded in light of continued bank losses.

“My concern has never been for the success or failure of individual banks or financial companies – it’s always and only for the success of the total system,” Emerson said.

Emerson also voted yesterday against a minimum of $40 billion and a potential $100 billion in TARP spending on mortgage relief for homeowners who are behind on their mortgage payments.

“These funds are going to overwhelmingly be spent in urban areas where the boom was biggest and the lending standards were most lax.  I see too much potential for abuse and not enough forethought in how these expenditures will be authenticated and tracked.  I have a philosophical problem with this part of the bill, because I don’t think we should reward any lenders who fibbed in order to approve loans for homes that their clients couldn’t afford.”