Liberals’ incessant demands for exit strategies for Iraq and Afghanistan aren’t matched by any desire to end government control over our economy. But one conservative — Republican Senator John Thune of South Dakota — has proposed just that.
Last week, Sen. John Ensign (R-Nevada) admitted to an extra-marital affair and was stripped of his post as Chairman of the Republican Policy Committee, the number three slot in the Republican Senate hierarchy. Thune may succeed him, as early as this week.
Before Ensign’s difficulties became public, Thune announced his Government Ownership Exit Plan, the cornerstone of which is a July 2010 deadline for the government to pull out of private company ownership. His bill has been introduced as an amendment to a tourism bill now in the Senate.
“You need a firm deadline out there,” Thune told HUMAN EVENTS.
Thune referenced Treasury Secretary Timothy Geithner’s testimony before the Senate Banking Committee on May 20, when he said the treasury didn’t need a plan yet for moving government out of private companies.
“I think they view this as sort of being a long-term endeavor,” Thune said.
But Thune sees an extended government stay in private companies as an inherent conflict of interest.
“You substitute political judgment, political decision making for what should be good business decisions,” Thune said. “You’re going to have every politician saying, ‘Don’t close the plant in my district, or don’t close this dealership or that dealership.’”
Thune’s bill doesn’t tell Treasury how to pull out of private companies, only that it must do so. In case the Treasury Secretary decides the assets held by the government are undervalued and it looks like they will regain their original purchase value, Geithner gets an extra year to hold onto them. The money that comes in from the sale of the TARP assets would go toward paying down the national debt.
After July 2011, however, all government ownership in private companies must be dissolved unless Congress modifies the deadline.
There are several different ideas proposed for the actual divestment process, including creating a group of trustees. But Thune, who voted for the original bailout in October, believes having a deadline is crucial to making sure government divestment actually happens.
The bill also requires the treasury to submit a plan to Congress on how it will end the conservatorship of Fannie Mae and Freddie Mac. Thune said he consulted several sources — among them the American Enterprise Institute and The Heritage Foundation — when putting the bill together.
Democrats, however, have been unwilling to sign onto the bill. Thune reached out to around half a dozen perceived as ‘pro-business’ but said he thinks none of them wanted to appear to challenge the administration’s prerogatives on managing TARP.
Other groups have lent their support, including the U.S. Chamber of Commerce, which represents three million businesses.
Sign up to the Human Events newsletter