TARP: The OMB director is grilled over the misuse of bank bailout funds for purposes other than intended by Congress. This taxpayer money wasn't intended to be the administration's perpetual slush fund.

When the specifically targeted and named Troubled Asset Relief Program was enacted, we were told it was a necessary and wise investment. It would stabilize the financial system and keep credit and money moving. We would even get our money back and then some.

Many banks didn't want the money or need it. Some were told to take it or they'd be audited. So they took it. The banks, eager to break free from federal interference, paid the money back with some interest. The money was intended to be returned to the Treasury for deficit reduction. But an administration that touts a token discretionary spending freeze has no such intention.

This is more than government failing to keep a promise. This is a patently unconstitutional act, as Republican Sen. Judd Gregg of New Hampshire tried to point out to Office of Management and Budget Director Peter Orszag on Monday over administration plans to transfer bailout funds to a new small-business loan program.

While President Obama was visiting Nashua, Gregg's birthplace, the senator took exception to Orszag's defense of the plan to funnel $30 billion of the paid-back TARP money into a program to provide credit to small businesses.

"This is the law," Gregg said, holding up the TARP guidelines he helped write in 2008. "Let me tell you what the law says. Let me read to you again, because you don't appear to understand the law. The law is very clear. The monies recouped from TARP shall be paid into the general fund of the Treasury for the reduction of the public debt."

Gregg added that TARP was not a political slush fund, saying, "It's not for a piggy bank because you're concerned about lending to small businesses and you want to get a political event when you go out and make a speech" in Nashua.

This and other misuses of TARP money are not only illegal, but also unconstitutional, as Fox News contributor and constitutional scholar Andrew Napolitano has argued. The power of the purse is given by the Constitution to Congress. Congress cannot abdicate or cede that responsibility to the executive branch. Nor can the administration appropriate that authority to itself.

Last year, Indiana filed a lawsuit challenging the constitutionality of using TARP funds to bail out Chrysler and General Motors. The state argued that the law was specifically written to help financial institutions, which the car firms clearly are not. The ruling on the petition brought before the U.S. Court of Appeals for the 2nd Circuit in New York was that while the case had constitutional merit, Indiana lacked legal standing to bring it.

"The administration lacks legal authority" to use TARP monies for anything it chooses outside the bill's specific intent, says Andrew Grossman, senior legal policy analyst at the Heritage Foundation. "If the authority is as broad as the administration and some lawmakers say, then it is unconstitutional. Congress cannot pass the buck and give unlimited power to the executive."

The administration seems to have discovered a new universal law of perpetual motion — that money once extracted from the taxpayers or borrowed from others can never be returned whence it came. As for the Constitution, we don't need no stinking Constitution.

This isn't just taxpayer money we're talking about. It's borrowed foreign money as well, largely Chinese money.

The leverage this gives our potential adversaries in a conflict or in crucial foreign policy decisions is unacceptable and dangerous. They should not have a financial veto over American foreign policy, but we've given it to them in the name of political expediency.

Might as well pull the TARP over us.

The Constitution, democracy and freedom are dead. May they rest in peace.