Obama Falsely Claims 'Every Penny' of Bailout Proceeds Will Go to Americans

(CNSNews.com) – Contrary to Sen. Barack Obama’s (D-Ill.) statement on the Senate floor that “every penny” of potential profit derived from the government’s purchase and resale of troubled mortgage-backed securities “will go directly back to the American people,” the law says the money will go to pay off federal debt – some of which is held by foreign entities.

In a speech in support of the financial bailout before the U.S. Senate Wednesday night, the Democratic presidential candidate claimed that American taxpayers would get their money back, raising the possibility they might even profit from the bailout.

“If this is managed correctly, and that is an important ‘if,’ we will hopefully get most of our money back, and possibly even turn a profit on the government's investment -- every penny of which will go directly back to the American people,” Obama said.

The claim is false. According to the bill that passed, the government will get all of its money back – but none will be returned directly to taxpayers.

Under Section 106(d) of the bill, entitled “Transfer to the Treasury,” “(all) revenues of, and proceeds from the sale of troubled assets purchased under this Act . . . shall be paid into the general fund of the Treasury for reduction of the public debt.”