Senate rejects GOP bid to end TARP payments

The Senate Thursday killed a Republican attempt to shut down the Wall Street bailout program.

The defeated proposal would have barred the Treasury Department from releasing any funds remaining from the $700 billion bailout passed last fall. It would not have affected repayment rules for banks and other recipients of bailout money.

GOP Sen. John Thune of South Dakota, who sponsored the amendment, said repealing Treasury's bailout authority would block Democrats from using the money to finance spending legislation such as a promised "jobs" bill. Thune said about $320 billion is still available.

The proposal garnered 53 votes, more than half of the Senate, but fell short of the 60 votes required to adopt it under the agreement by which it was afforded a vote. The majority vote probably means it won't be the last time the senate debates the issue

"The American people, I think, have made it clear that they're tired of the bailouts," Thune said.

Officially called the Troubled Asset Relief Program, or TARP, the bailout was designed to stabilize the U.S. financial system during last year's crisis. But it's also been used to prop up automobile manufacturers and House Democrats used most of the remaining bailout funds to finance a jobs bill that included highway and bridge construction and small business tax cuts.

Banking Committee Chairman Christopher Dodd, D-Conn., reminded the Senate that the Obama administration has promised to dedicate TARP money to help ease the foreclosure crisis and help smaller community banks make small business loans.

"We need to get assistance and support into these smaller businesses and to these community banks in order that they can survive and get on their feet, and credit will flow where it isn't flowing today," Dodd said.

The vote came as the Senate entered into the second day of debate on a bill to allow the federal government to borrow an additional $1.9 trillion to pay its bills, a record increase that would permit the national debt to reach $14.3 trillion.