WASHINGTON — The Senate on Tuesday narrowly defeated a measure to cut the Treasury's authority under the Troubled Asset Relief Program, with the close vote showing lawmakers' growing impatience with bank bailouts.
The measure received 47 votes in favor, 48 opposed. It would have blocked Treasury from recycling any Tarp funds that are repaid by bank recipients. Treasury would have been required to reduce the balance of its Tarp authority by an amount equal to the funds the bank has repaid.
Sen. John Thune, R-S.D., offered the measure as an amendment to popular legislation to bolster the banking system and revamp federal mortgage programs. The legislation is set for a vote, which could come as early as Tuesday.
Senate Banking Committee Chairman Christopher Dodd, D-Conn., urged his colleagues to vote against the measure, warning that some banks may soon need more government capital after the results of the administration's stress tests are revealed this week.
"The last thing you want to be doing is coming back up here to vote for more money," Dodd said.
Thune argued the measure protected taxpayers' interests. "These are taxpayer dollars, they are not discretionary slush funds," Thune said of any repaid funds.