) -- With the bailout program's expiration approaching fast, and hundreds of billions of dollars' worth of unused funds, the government is once again encountering the question: What to do about TARP?

The Troubled Asset Relief Program may never achieve its stated intention -- relieving the banks of troubled assets -- but it has already achieved the stability in the financial system it sought. There's a viable argument that maintaining stability may require TARP's existence, and little more.

Few fear a failure of the country's biggest banks anymore, because the government has made it clear that such an event won't occur.

Bank of America

(BAC) - Get Report



(C) - Get Report


JPMorgan Chase

(JPM) - Get Report


Wells Fargo

(WFC) - Get Report

and others are here to stay.

Therefore, depositors aren't running to draw down funds, and banks have enough faith in the system to lend to one another freely, even if they're more selective in providing credit to consumers and businesses.

The Obama administration has another $139 billion in TARP funds that haven't been injected into banks. It has so far received $85 billion in repayments, dividends, interest and warrant repurchases. It expects another $50 billion to come back over the next year and a half.

But TARP's horizon ends on Dec. 31, and there's no clear consensus on what to do with the program. Some suggestions have been floated: Homeowner assistance, small-business lending,

deficit paydown

, an extension through 2010, or an outright wind-down.

Critics counter that the program hasn't included enough transparency, enough bipartisanship, or enough help for the taxpayers that are implicitly financing it. Since the money has been approved, why not put it to good use? Consumers and homeowners are still struggling while healthy banks like JPMorgan,

Goldman Sachs

(GS) - Get Report


Morgan Stanley

(MS) - Get Report

have repaid TARP and moved on. Meantime, small businesses are struggling to


while corporate titans map out their recovery plans and engineer

huge buyouts


Furthermore, the government has an ample reserve of options to assist banks without TARP, including the Federal Deposit Insurance Corp.'s insurance fund and the Federal Reserve's emergency lending powers. If there's another crisis of tremendous scale, they argue, regulators ought to approach Congress once again for bailout funds.

"The political class has twisted TARP into a fund to finance its pet programs and constituents, and the faster it fades away, the better for taxpayers and the financial system," Rep. Jeb Hensarling (R., Texas) wrote last month.

Part of the issue with rolling up TARP is that the financial system is now heavily reliant on the government's largesse, for better or worse. Many market participants still believe there's a financial bogeyman or two lurking unforeseen. The notion that the feds may be unable to provide immediate relief for another disaster might frighten the market enough to cause the disaster itself.

While those arguments have merit, there's little doubt about what would happen if regulators came to Congress once again with hat in hand.

TARP took several revisions and votes, with heaps of political wrangling, before it finally passed with

marginal support

. Uncertainty surrounding its


during the fall of 2008 exacerbated the financial system's stress, throwing the stock market into a

schizophrenic fit

and further icing the credit markets.

Of course, there was good reason for all that debate. It would be difficult for a lawmaker to approve a $700 bailout without serious consideration, then ask for constituent support.

Whatever happens to TARP, there is sure to be more political grandstanding, since lawmakers will have to debate its fate in the coming weeks. But now that TARP has served its purpose and beyond, its new one may not require additional spending. It may just need to exist.


Written by Lauren Tara LaCapra in New York