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TARP: How it's playing in the midterm campaigns

By Felicia Sonmez
A new poll from the Pew Research Center/National Journal Congressional Connection indicates that the Troubled Asset Relief Program, which officially came to an end last Sunday, continues to be a major voting issue ahead of the November midterms.

Forty-six percent of adults in the new survey said they would be less likely to vote for a candidate who "supported the government providing major loans to banks during the 2008 financial crisis." This was more than the number of voters who said they were less likely to vote for a candidate on any other issue.

Two years after then-President George W. Bush signed the bill into law following its passage by the Senate and House, TARP (or "the Wall Street bailout," as most voters know it) continues to haunt candidates up and down the ballot.

It has helped cause primary losses to longtime incumbents (see Bennett, Bob), and is even part of the calculus, as evident in Monday night's Connecticut Senate debate, for candidates who aren't members of Congress.

Even the news late last week that TARP may end up costing taxpayers less than $50 billion instead of its original $700 billion price tag looks unlikely to re-shape the midterms four weeks from Election Day.

White House senior adviser David Axelrod told The Fix on Tuesday night that the estimated cost of TARP "could be better than" the estimated $50 billion.

"At worst, it's going to come in at about a tenth of the cost -- or less -- that people estimated, and we may actually end up turning a profit when all is said and done," Axelrod said. He added that TARP's success is "a credit to the way in which Tim Geithner and the Treasury has managed that program."

Asked whether that's likely to help Democratic candidates next month, Axelrod said he wasn't certain.

"I don't know if the recognition or the realization of what happened with the TARP program will sink in by November," he said. "But it's good for the country. It's good for taxpayers. And it shows that you can -- if you're creative and you're hard-nosed and you manage well and you demand accountability -- you can make these things work."

Candidates who voted for TARP are hoping that the lower price tag will help them justify their vote to bail out the financial industry. But in competitive Senate, House and gubernatorial races, it still appears to be an uphill battle against the bailout this fall.

The senator who may have the most at stake on her TARP vote is Lisa Murkowski (R-Alaska) who, like Bennett, was booted by members of her party in her primary this cycle.

Murkowski, who is running as a write-in candidate against attorney Joe Miller (R) and Sitka Mayor Scott McAdams (D), is banking on the fact that Alaska's general-election voters will be more forgiving than the GOP primary electorate. But Miller has been holding Murkowski's feet to the fire; earlier Tuesday, his camp sent out a release slamming Murkowski for supporting TARP while having received more than $217,000 in contributions from Wall Street.

Six other GOP senators who voted for TARP are up for reelection this year -- John McCain (Ariz.), Richard Burr (N.C.), Johnny Isakson (Ga.), Chuck Grassley (Iowa), Tom Coburn (Okla.) and John Thune (S.D.). None is in danger of losing his seat because of TARP (although Thune will have to answer for his vote if he runs for president in 2012). The only one of the races not rated as "Solid Republican" by the nonpartisan Cook Political Report is Burr's, which is rated as "Likely Republican."

Two other Republicans who voted for TARP, Reps. Mark Kirk (Ill.) and Roy Blunt (Mo.), are now in competitive Senate races. Blunt, in particular, is being hammered for his vote by his opponent, state Secretary of State Robin Carnahan (D), for his instrumental role in rounding up votes for TARP as former House Minority Whip. Kirk has said in recent months that while he voted for TARP, the program should conclude as soon as possible.

Meanwhile, three of the four GOP senators who voted against TARP -- Sens. Richard Shelby (Ala.), Mike Crapo (Idaho) and Jim DeMint (S.C.) -- are in "Solid Republican" races. Sen. David Vitter (La.) is in a competitive race against Rep. Charlie Melancon (D-La.), who voted in favor of TARP; Melancon has instead sought to focus the race on Vitter's involvement in a prostitution ring and his support for what Melancon terms the "BP bailout" in his latest TV ad.

On the Democratic side, eight Senate Democrats up for reelection this year voted for TARP -- Blanche Lincoln (Ark.), Barbara Boxer (Calif.), Patty Murray (Wash.), Daniel Inouye (Hawaii), Patrick Leahy (Vt.), Barbara Mikulski (Md.) and Charles Schumer (N.Y.) and Senate Majority Leader Harry Reid.

Lincoln is the most endangered of the lot. She weathered a primary in which her opponent, Lt. Gov. Bill Halter (D), focused on her TARP vote, but could lose to an opponent, Rep. John Boozman (R), who also voted in favor of TARP. Neither candidate has made much of an issue of the other's vote.

Boxer, Murray and Reid are all in toss-up races; each has had to deal with criticism from his or her opponent related to TARP. (Murray's opponent, former state Sen. Dino Rossi (R), is up with a new TV ad this week hitting Murray for "voting with Pelosi and Reid for the Wall Street bailout.") The other four Democrats -- Inouye, Leahy, Mikulski and Schumer -- are all in "Solid Democratic" races.

It's worth noting that while several Democrats who voted for TARP are in tough races, one of the most vulnerable incumbents -- Sen. Russ Feingold (D-Wis.) -- opposed it. (Sen. Ron Wyden (D-Ore.) also voted against TARP; he's a likely shoo-in this fall.)

Three Democratic House members who supported TARP -- Rep. Brad Ellsworth (Ind.), Rep. Kendrick Meek (Fla.) and Joe Sestak (Pa.) -- are facing tough Senate races this fall, but so is Democratic Rep. Paul Hodes (N.H.), who voted against TARP. (Both Hodes and his Republican rival, former state Attorney General Kelly Ayotte, have denounced retiring Sen. Judd Gregg's (R) vote in favor of TARP.)

TARP has also reared its head in gubernatorial races. In its latest TV ad, the Republican Governors Association is hammering Rep. Neil Abercrombie (D-Hawaii), who is running for governor, for supporting TARP. Abercrombie is favored to win in the fall, but the RGA and Lt. Gov. Duke Aiona's (R) camp are not giving up without a fight.

TARP is also affecting races where neither candidate was in Congress to vote for it.

In the Connecticut Senate race, state Attorney General Richard Blumenthal (D) stated in Monday night's debate that he would not have voted for TARP, while his opponent, former World Wrestling Entertainment CEO Linda McMahon (R), said she would have supported it while "holding my nose." (McMahon's position was interesting in that it makes her one of the few Republican candidates this fall to publicly support TARP; it's worth noting, however, that she's running in a heavily Democratic state.)

Ophthalmologist Rand Paul (R) said during the Kentucky Senate primary that he would refuse donations from any members of Congress who voted for TARP, but he has since softened that approach, accepting contributions from a number of Republican leaders who backed TARP. Paul's opponent, state Attorney General Jack Conway (D), said he would have opposed TARP; Paul, in turn, has criticized Conway as having shifted positions since the primary.

Bennett, for his part, told the Salt Lake Tribune late last week that he feels somewhat vindicated for his TARP vote.

"I did try saying during the campaign that TARP was going to pay the money back and that that ... was not going to cost the taxpayer anything," Bennett said. "Apparently nobody believed me. Or if they did, they decided to vote against me anyway."

By Felicia Sonmez  | October 7, 2010; 1:13 PM ET
Categories:  Senate  
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