Tony Fratto
Former White House Spokesman

Barney Frank isn't Irish, but he is a crafty and lucky leprechaun—and he knows a pot of gold when he sees it.

The Chairman of the House Financial Services Committee doggedly followed the financial rescue rainbow and discovered that banks really are paying back taxpayers with those billions we invested in them last fall—and filling Barney's pot of gold.

And Barney has a plan to spend it. ("Ahh...lucky, me lucky charms!")

AP Barney Frank

Remember that under the financial rescue program the government injected capital in banks to shore up their balance sheets in exchange for preferred shares. Banks were required to pay back the taxpayer annual dividends on those preferred shares—yields of 5 percent for the first five years, followed by 9 percent per year until the capital is repaid. 

And banks have been dutifully paying the government their dividends on a quarterly basis. So far, the U.S. Treasury has reported receiving more than $4 billion in dividend payments from banks. 

Legislation introduced by Frank (HR 3068) would take those dividends—originally promised as a return on the taxpayer's rescue of the financial system—and spend it on what are proving to be inefficient and ineffective foreclosure relief efforts.

After all, for a congressman, the only thing better than spending tax dollars once is to spend them twice.

The problem for Frank is that taxpayers were told that the return on their investment would accrue back to them, not to congressional spenders. The goal of paying back the taxpayer was a critical feature of the financial rescue legislation—in fact, the Emergency Economic Stabilization Act requires the Secretary of the Treasury to present a plan to recoup the government's investment after five years if the capital hasn't been repaid.

It's hard to see how the financial rescue can be revenue neutral if Frank gets his way and the proceeds are spent.

With fiscal deficits now spinning out of control, Congress should keep its promise to taxpayers and use the bank dividend payments to offset existing spending programs, not use it for even more new spending.

Barney will have to find another pot of gold.

• Check Out Larry Kudlow's Money and Politics Blog Here

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Tony Fratto is a CNBC on-air contributor and most recently served as Deputy Assistant to the President and Deputy Press Secretary for the Bush Administration.