Support John's bill to end government ownership of private entities acquired under the TARP program.
The government has taken unprecedented actions over the past 15 months to stabilize the economy, including taking direct ownership stakes in private companies. This creates a dangerous conflict of interest between the federal government and the private sector. The government shouldn’t be an owner of companies it regulates in the private marketplace.
Ends government ownership of private companies by:
Preventing the U.S. Treasury from purchasing additional ownership stakes in private companies in any form, including preferred stock, common stock or warrants.
Requiring the U.S. Treasury to sell any ownership stake of private entities by July 1, 2010.
Requiring the Secretary of the Treasury to submit a plan within 90 days for how it will end the conservatorship of Fannie Mae and Freddie Mac and end government ownership of those entities.
Protects taxpayers by:
Requiring that revenue from the sale of assets be dedicated to debt reduction.
Allowing the Secretary of the Treasury to hold current assets for up to one additional year, IF the assets are determined to be undervalued AND if there is a reasonable expectation that the assets will increase to the original purchase value in the near future.
Prohibiting the U.S. Treasury from holding any direct ownership in private companies beyond July 1, 2011, without additional authority granted by Congress.
Protects private sector management decisions and prevents conflicts of interest by:
Prohibiting the federal government from influencing management decisions of private companies in which it currently holds ownership by appointing senior executives and board members, closing plants, modifying labor contracts, or influencing other financial decisions of the companies.
Increases transparency and accountability by:
Requiring Treasury to report to Congress any government-held ownership stake in a private entity and any loans or loan guarantees made by the Federal Reserve.
Providing that the government ownership divestiture process will be overseen by the TARP oversight board and requiring Treasury to report to Congress on the progress of the divestiture process.
Endorsements for the Government Ownership Exit Plan
“James Madison once said, ‘Since the general civilization of mankind, I believe there are more instances of the abridgment of freedoms of the people by gradual and silent encroachment of those in power than by violent and sudden usurpations.’ In the wake of a series of government interventions into the free markets, taxpayers have been forced to witness the ‘gradual and silent encroachment’ Madison warned of. It is time for an exit strategy.”
-- Grover Norquist, President
“There is an old axiom that the first step in getting out of a hole is to stop digging. Your bill does this by prohibiting the purchase of any additional ownership stake in private companies by the federal government.”
-- Larry Hart, ACU
“The U.S. Chamber of Commerce, the world’s largest business federation representing more than three million businesses ...supports S. 1242 which would ensure that the federal government removes itself from its necessary but unprecedented intervention in the U.S. Economy as soon as possible... Now, it is time to develop a transparent exit strategy to ensure the timely withdrawal of the federal government from these most extreme and unusual forms of intervention ... Absent a clear, timely, and predictable exit plan, private capital will not by fully deployed. Moreover, the longer the delay, the risk grows that such extreme forms of intervention will become an acceptable or frequent form of response.”
-- R. Bruce Josten, Executive Vice President
“Over the past 15 months, lawmakers have put American taxpayers at risk by doling out hundreds of billions of dollars to failing companies. As a result, taxpayers now own $85 billion in preferred stock in Fannie Mae and Freddie Mac, and also hold a stake in more than 500 private companies. ... On behalf of the 1.2 million members and supporters of the Council for Citizens Against Government Waste (CCAGW), I ask that you support this legislation.”
-- Thomas Schatz, President
“On behalf of the 362,000 members of the National Taxpayers Union (NTU), I write in support of S. 1242. This legislation would protect taxpayers from the risks associated with nationalizing institutions by requiring federal divestiture of ownership stakes, prohibiting government meddling in management, and instructing the Treasury Department to develop a plan that will end Washington’s conservatorship of Fannie Mae and Freddie Mac. ... NTU applauds your efforts to restore rationality after the insanity we’ve seen in recent months.”
