President Barack Obama said Monday that he is considering using funds originally slated to bail out banks and financial institutions to create jobs and bring down the unemployment rate.
Obama, who spoke to reporters briefly in the Oval Office following a meeting with Turkish Prime Minister Recep Tayyip Erdogan, declined to divulge any details of his plans but said more information would be forthcoming Tuesday when he delivers a speech on the economy.
The $700 billion Troubled Assets Relief Program, or TARP, was initially designed as a method to prop up failing banks and provide extra capital to the strained financial system.
But with banks recovering more swiftly than anticipated and repaying government loans, many Democrats have increasingly turned to the idea of using the funds to create jobs more directly.
Since the program was first enacted in late 2008, banks have paid dividends and interest totaling about $15 billion, according to the Treasury Department, with aid payments of about $71 billion already repaid.
Bank of America announced last week that it plans to repay an additional $45 billion, and Treasury officials say they expect bank repayments of about $175 billion by the end of the year.
However, Republicans are increasingly concerned about the proposal to use the TARP funds for job creation and other purposes, with some accusing Democrats of seeking to create a slush fund.Using the funds for other purposes would likely require new legislation, however.
Sen. Judd Gregg, R-N.H., the top GOP member of the Senate Budget Committee and one of the lead negotiators of the bill authorizing the financial bailout, said that the idea of using TARP funds for other purposes was "inappropriate and disturbing."
"Our government is spending well beyond its means; we must work harder to decrease the extraordinarily high level of federal debt, not add more deficit spending to the backs of our children," Gregg said. "TARP authority should only be used to prevent dire and irrevocable harm to our financial system and credit markets that provide liquidity for businesses and consumers—it was not designed to be used like rainy-day cash to throw around at any problem."
He added, "This is the bottom line: if TARP authority, which we now are unlikely to use, is reduced in order to spend money on jobs programs, the result will be an increase in the deficit and the debt."
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.