The President’s Permanent Political Slush Fund

After suffering major electoral and legislative defeats last month, President Barack Obama took to the campaign trail in Nashua, New Hampshire, pitching his administration’s latest new plan to lower our nation’s double digit unemployment rate. This time, the President hopes to do for small businesses what Fannie Mae and Freddie Mac did for home mortgages. Specifically, he wants to create a new $30 billion “Small Business Lending Fund” which will loan money to banks with assets under $10 billion at favorable new rates, as long as they comply with a slew of new regulations designed to incentivize them to loan that money to small businesses. Never mind that a recent poll of small business owners by the National Federation of Independent Businesses ranked “Finance and Interest Rates” as the second to last most important problem facing their business.

And just where does the President plan to get this new $30 billion? The President explained yesterday: “This proposal takes the money that was repaid by Wall Street banks to provide capital for community banks on Main Street.” In other words, TARP – the $700 billion Troubled Asset Relief Program first signed into law by President George Bush, and then used by Treasury Secretary Hank Paulson to force many financial firms into taking taxpayer money they never wanted in the first place. But if Wall Street banks are paying-back their TARP funds, then how can President Obama say the following when justifying his  Financial Crisis Responsibility Fee: