This vote was on an amendment by David Vitter, R-La., that would allow for the remaining funds in the Troubled Asset Relief Program (TARP, the law authorizing the Treasury Department to buy up to $700 billion in “toxic” mortgage assets) to be recovered, except for $100 billion, which would be used to purchase toxic mortgage-backed assets.  The amendment was offered to the budget resolution that serves as the blueprint for Congress’ budget priorities in fiscal 2010.  The budget resolution sets overall spending targets for the Appropriations committees and outlines other budget rules.

Vitter said his amendment was offered as a counterpoint to another amendment by Jack Reed, D-R.I. 

Vitter said his amendment would protect funding for purchasing mortgage-backed “toxic” securities, which is what TARP was originally enacted to do.

“What my amendment says is that we are not any longer going to allow the Treasury to do other things on an ad hoc basis, making it up as they go along every week. In the process, we would reduce the debt of this country by at least $136 billion under this amendment,” Vitter said.

Reed’s amendment, which was approved (see vote 133), would allow the remaining TARP funding to be used for saving homes and small businesses, bolstering the bond market, expanding credit and strengthening government oversight of the TARP program.

“The restriction of these funds proposed by Senator Vitter will undercut these objectives. In addition, the Reed amendment has strengthened the oversight responsibilities,” Reed said.

By a vote of 28-70, Vitter’s amendment was rejected.  Of Republicans present, 26 voted for the amendment and 15 voted against it.  All but two Democrats present voted against the amendment.  The end result is that the measure went forward without language that would have returned all unspent TARP funding, except for $100 billion that would remain set aside for purchasing toxic mortgage-backed assets.