WH Mulls Spending TARP Money To Reduce Deficit

Something amazing has happened in the White House: they’ve discovered that they can rob Peter to pay Paul. In other words, they want to take money from the TARP program (money that was borrowed in the first place, so it’s deficit spending) and use it to reduce the deficit.
http://online.wsj.com/article/SB125799009185344567.html

The Obama administration, under pressure to show it is serious about tackling the budget deficit, is seizing on an unusual target to showcase fiscal responsibility: the $700 billion financial rescue.

The administration wants to keep some of the unspent funds available for emergencies, but is considering setting aside a chunk for debt reduction, according to people familiar with the matter. It is also expected to lower the projected long-term cost of the program -- the amount it expects to lose -- to as little as $200 billion from $341 billion estimated in August.

The idea is still a matter of debate within the administration and it is unclear how much impact it would have on the nation's mounting deficit levels. Still, the potential move illustrates how the Obama administration is trying to find any way it can to bring down the deficit, which is turning into a political as well as an economic liability.

So they borrow money to spend $700 billion in TARP funds, then decide to use some of that money to “pay down some debt.” Watch closely, ladies and gentlemen, if you want to see which shell the pea is under.

White House Chief of Staff Rahm Emanuel is pressing for substantial spending cuts to go with any tax increases to try to avoid the "tax and spend" label that has bedeviled Democrats, according to administration and congressional officials.

The administration is constrained in tackling the mounting deficit, since raising taxes or slashing spending could stunt economic growth. Administration officials say the Obama economic team is especially concerned that rapid deficit reduction could hurt the economy.

Mr. Emanuel, Mr. Obama, if you truly want to lower the deficit, I can help you. First, repeal the ineffective stimulus package. Then abandon plans to increase our national debt through Cap & Tax and your ObamaCare bills… simply withdraw the bills and abandon these expensive and risky plans. Why make the very problem you’re trying to solve WORSE by more deficit spending?

If you want to get out of a hole, the first step is to stop digging that hole deeper.

My suggestions won’t SOLVE the problem, but they will help.