To require the Secretary of the Treasury to use any amounts repaid by a financial institution that is a recipient of assistance under the Troubled Assets Relief Program for debt reduction.

1. Adds TITLE II--DEBT REDUCTION PRIORITY ACT at the end of the bill

   Adds a title

   In S. 386 · Reported to Senate

   (b) Effective Date and Application.--The amendments made by this section shall take effect on the date of enactment of this Act and shall apply to conduct on or after the date of enactment, except that subparagraph (B) of section 3729(a)(1) of title 31, United States Code, as added by subsection (a)(1), shall take effect as if enacted on June 7, 2008, and apply to all claims under the False Claims Act (31 U.S.C. 3729 et seq.) that are pending on or after that date.

   Inserted: TITLE II--DEBT REDUCTION PRIORITY ACT

   Inserted: SEC. 21. SHORT TITLE.

   Inserted: This title may be cited as the "Debt Reduction Priority Act".

   Inserted: SEC. 22. FINDINGS.

   Inserted: Congress finds the following:

   Inserted: (1) On October 7, 2008, Congress established the Troubled Assets Relief Program (TARP) as part of the Emergency Economic Stabilization Act (Public 110-343; 122 Stat. 3765) and allocated $700,000,000,000 for the purchase of toxic assets from banks with the goal of restoring liquidity to the financial sector and restarting the flow of credit in our markets.

   Inserted: (2) The Department of Treasury, without consultation with Congress, changed the purpose of TARP and began injecting capital into financial institutions through a program called the Capital Purchase Program (CPP) rather than purchasing toxic assets.

   Inserted: (3) Lending by financial institutions was not noticeably increased with the implementation of the CPP and the expenditure of $250,000,000,000 of TARP funds, despite the goal of the program.

   Inserted: (4) The recipients of amounts under the CPP are now faced with additional restrictions related to accepting those funds.

   Inserted: (5) A number of community banks and large financial institutions have expressed their desire to return their CPP funds to the Department of Treasury and the Department has begun the process of accepting receipt of such funds.

   Inserted: (6) The Department of the Treasury should not unilaterally determine how these returned funds are spent in the future and the Congress should play a role in any determination of future spending of funds returned through the TARP.

   Inserted: SEC. 23. DEBT REDUCTION.

   Show 23 more inserted paragraphsShow less

   Inserted: (a) In General.--Title I of the Emergency Economic Stabilization Act of 2008 (12 U.S.C. 5211 et seq.) is amended by adding at the end the following:

   Inserted: "SEC. 137. DEBT REDUCTION.

   Inserted: "Not later than 30 days after the date of enactment of this section, the Secretary of the Treasury shall deposit any amounts received by the Secretary for repayment of financial assistance or for payment of any interest on the receipt of such financial assistance by an entity that has received financial assistance under the TARP or any program enacted by the Secretary under the authorities granted to the Secretary under this Act, including the Capital Purchase Program, in the Public Debt Reduction Payment Account established under section 3114 of title 31, United States Code.".

   Inserted: SEC. 24. ESTABLISHMENT OF PUBLIC DEBT REDUCTION PAYMENT ACCOUNT.

   Inserted: (a) In General.--Subchapter I of chapter 31 of title 31, United States Code, is amended by adding at the end the following new section:

   Inserted: "Sec. 3114. Public Debt Reduction Payment Account

   Inserted: "(a) There is established in the Treasury of the United States an account to be known as the Public Debt Reduction Payment Account (hereinafter in this section referred to as the 'account').

   Inserted: "(b) The Secretary of the Treasury shall use amounts in the account to pay at maturity, or to redeem or buy before maturity, any obligation of the Government held by the public and included in the public debt. Any obligation which is paid, redeemed, or bought with amounts from the account shall be canceled and retired and may not be reissued. Amounts deposited in the account are appropriated and may only be expended to carry out this section.

   Inserted: "(c) There shall be deposited in the account any amounts which are received by the Secretary of the Treasury pursuant to section 137 of the Emergency Economic Stabilization Act of 2008. The funds deposited to this account shall remain available until expended.

   Inserted: "(d) The Secretary of the Treasury and the Director of the Office of Management and Budget shall each take such actions as may be necessary to promptly carry out this section in accordance with sound debt management policies.

   Inserted: "(e) Reducing the debt pursuant to this section shall not interfere with the debt management policies or goals of the Secretary of the Treasury.".

   Inserted: (b) Conforming Amendment.--The chapter analysis for chapter 31 of title 31, United States Code, is amended by inserting after the item relating to section 3113 the following:

   Inserted: "3114. Public debt reduction payment account".

   Inserted: SEC. 25. REDUCTION OF STATUTORY LIMIT ON THE PUBLIC DEBT.

   Inserted: Section 3101(b) of title 31, United States Code, is amended by inserting "minus the aggregate amounts deposited into the Public Debt Reduction Payment Account pursuant to section 3114(c)" before ", outstanding at one time".

   Inserted: SEC. 26. OFF-BUDGET STATUS OF PUBLIC DEBT REDUCTION PAYMENT ACCOUNT.

   Inserted: Notwithstanding any other provision of law, the receipts and disbursements of the Public Debt Reduction Payment Account established by section 3114 of title 31, United States Code, shall not be counted as new budget authority, outlays, receipts, or deficit or surplus for purposes of--

   Inserted: (1) the budget of the United States Government as submitted by the President,

   Inserted: (2) the congressional budget, or

   Inserted: (3) the Balanced Budget and Emergency Deficit Control Act of 1985.

   Inserted: SEC. 27. REMOVING PUBLIC DEBT REDUCTION PAYMENT ACCOUNT FROM BUDGET PRONOUNCEMENTS.

   Inserted: (a) In General.--Any official statement issued by the Office of Management and Budget, the Congressional Budget Office, or any other agency or instrumentality of the Federal Government of surplus or deficit totals of the budget of the United States Government as submitted by the President or of the surplus or deficit totals of the congressional budget, and any description of, or reference to, such totals in any official publication or material issued by either of such Offices or any other such agency or instrumentality, shall exclude the outlays and receipts of the Public Debt Reduction Payment Account established by section 3114 of title 31, United States Code.

   Inserted: (b) Separate Public Debt Reduction Payment Account Budget Documents.--The excluded outlays and receipts of the Public Debt Reduction Payment Account established by section 3114 of title 31, United States Code, shall be submitted in separate budget documents.

   Original wording

   At the end of the bill, add the following:

Read automatically from the Congressional Record. Check the original before relying on it.

As printed