Dodd, Finance Official Share Conflicting Views On TARP

By Laura Smith

The Committee on Banking, Housing and Urban Affairs held a meeting Thursday to talk about the Emergency Economic Stabilization Act and TARP (Trouble Asset Relief Program).

The panel consisted of Herbert M. Allison, Jr., Assistant Secretary for Financial Stability; Neil Barofsky, Special Inspector General for the Troubled Asset Relief Program; Gene L. Dodaro, Acting Comptroller General of the United States; and Elizabeth Warren, Chair of the Congressional Oversight Panel.

Chairman Christopher J. Dodd (D-CT) said Treasury Secretary Henry Paulson, Federal Reserve Chairman Ben Bernanke, and SEC Chairman Chris Cox came to Congress with an important message, and that was that the American economy was close to a total collapse.

“Our nation was in the midst of an economic crisis that threatened small businesses’ ability to make payroll, cost us more than half a million jobs, turned the American dream of homeownership into a nightmare for many, kept students from getting college loans, and wiped out hundreds of billions of dollars in savings that Americans were counting on for their retirement,” he said.

He said the Bush administration had a proposal on how to help large and small businesses who were unable to access the credit they needed to operate, but called it was unacceptable.

He stated that the Bush administration asked for an unprecedented amount of taxpayer money and executive power under the unchecked control of one unelected individual, with no guidelines to ensure that it would be used properly.

“Doing nothing wasn’t an option. But neither was this proposal,” Dodd said.

Herbert Allison said earlier this year that what the nation faced was no longer just a financial crisis; it was a full-blown economic crisis. He said that in January alone, 741,000 Americans lost their jobs, home foreclosures were at a rapid rate, and businesses and families were struggling to find credit.

“In short, the economy was in a free fall and there was increasing concern we were headed towards a second Great Depression,” Allison said.

He said a comprehensive strategy was put in place to stabilize the financial system and the housing market, to stimulate economic activity, and to provide help to those in most need.

“TARP has been vital to our achievements to date, and it will continue to be an important part of our recovery. The recovery has just begun, the financial system remains fragile, and the credit markets are not fully functioning. And with unemployment still unacceptably high, home foreclosures still rising, and many Americans still suffering through no fault of their own, we still have work to do,” Allison said.

He stated that EESA had authorized $700 billion for TARP, and that as of September 21, 2009, Treasury has announced plans to provide $644 billion for specific TARP programs.

“Of that amount, we have entered into commitments of $444 billion, and we have disbursed $365 billion,” he said.

Allison said a large part of the total activity to date occurred last fall under the Capital Purchase Program (CPP) following the adoption of EESA in October 2008.

New GOP Website “Shines Light" On Government Spending

By Mariko Lamb

Rep. Cathy McMorris Rodgers (R-Wash.) unveiled a new GOP website Thursday that “shines the light on government spending.” Sunshine.gop.gov tracks stimulus project spending, earmarks, TARP programs, and transparency legislation.

“We thought it was important that taxpayers actually be able to see exactly how every dollar was being spent,” she said. “Sunshine.gop.gov will give taxpayers greater insight and ultimately hold the federal government accountable for how it spends our tax dollars.”

The site is more user-friendly and cost-effective than Recovery.gov, she said. Development of sunshine.gop.gov cost only $20,000 as opposed to the recent $18 million contract signed to update the administration’s stimulus site, Recovery.gov.

Rodgers urged both the public and the media to use the website as a tool to conduct research on government spending and pursue stories on wasteful government spending.

“We’re making a transition as far as using new media [and] the internet. It’s impacting the way we communicate as a society, but its also is impacting the way people get information,” she said. “This is a step in the right direction.”

TARP Has Made Progress Says Treasury Official

By Mariko Lamb, Talk Radio News Service

Assistant Treasury Secretary for Financial Stability Herbert Allison, Jr. said that the Troubled Asset Relief Program (TARP) has been “key to stabilizing the financial system and preventing greater deterioration in the availability of credit,” in his testimony to the House Oversight and Investigations Subcommittee Wednesday.

“There’s also signs that the economy is beginning to mend,” he said. Indications of economic stabilization include an increase in the issuance of corporate debt, increase in consumer confidence, and higher housing starts.

Despite these improvements, “Our financial system and our economy remain vulnerable,” he said, as unemployment and home foreclosures remain high and strains in the commercial real estate market continue to build. “This is why Treasury must remain vigilant and press ahead with our financial stabilization efforts,” he said.

Allison attempted to assure members of the subcommittee that taxpayers can put their trust in the Treasury, and that the agency is dedicated to high standards of transparency.

“We feel a great obligation as responsible stewards of their money,” he said, assuring those at the hearing that the Treasury is committing every effort to ensuring an ample return for taxpayers.

“I will regularly update Congress on our progress. We have productive, working relationships with our four oversight bodies--Special Inspector General of the TARP, Government Accountability Office, Congressional Oversight Panel, and Financial Stability Oversight Board,” he said.

Information on lending activities of Treasury-invested banks can be found at www.financialstability.gov.

Taxpayers Want Transparency With TARP, Says Treasury Official

Annie Berman - Talk Radio News Service

Taxpayers are not being told what is happening with the money they have involuntarily invested in the Troubled Asset Relief Program (TARP). Treasury Special Inspector General Neil Barofsky testified to the Oversight and Government Reform Committee that the most important recommendation that he could give to the committee would be a push for more transparency.

Tuesday’s hearing was a part of a series of hearings in which the TARP program is assessed and new developments of the program are reported to the committee.

Barofsky made sure that he was able to answer all questions honestly and thoroughly, as he recognized the concern that the committee has over transparency.

“The full transparency that we [the committee] asked for, which this President and this administration has promised is being blocked by the bureaucracy that often seems to say ‘just trust us and we will deliver,’” said Ranking Member Rep. Darrell Issa (R-Calif.).

Issa also brought up the staggering $23.7 trillion figure that has everyone on the Hill buzzing, and possibly a little scared. Issa asked Barofsky if he ever said in his reports that the U.S. would lose such an enormous amount of money in assurances and insurances.

“Of course not, and we explicitly point out in the report the existence of collateral…If every program is maximized to the greatest extent possible, that’s what that number is.”

In the last 3 months of the TARP, there have been an expansion of programs including expansion of the mortgage modification program to which approximately $18 billion has been allocated. There have also been more than $70 billion in TARP paybacks, and the Public Private Investment Program (PPIP) was launched with an allocation of approximately $30 billion in taxpayer money.

“Unfortunately, in rejecting SIGTARP’s basic transparency recommendations, TARP has become a program in which taxpayers are not being told what most of the TARP recipients are doing with their money, have still not been told how much their substantial investments are worth, and will not be told the full details of how their money is being invested,” said Barofsky in his opening statements.

Barofsky’s position was created to specifically oversee what happens to TARP funds. He and his office carry out audits on institutions that have received TARP funds, and carry out investigations of issues concerning securities fraud, suspected accounting fraud, insider trading, mortgage service misconduct, mortgage fraud, public corruption, false statements and tax investigations. These investigations were developed through tips or leads provided anonymously to the SIGTARP Hotline (877-SIG-2009) and online at www.SIGTARP.gov.

Frank Unveils Plan To Bailout Main Street

By Joseph Russell- Talk Radio News Service

Rep. Barney Frank (D-Mass.) introduced the “TARP for Main Street Act of 2009” during a House Financial Services Committee meeting Thursday. The legislation is designed to use money made available under the Troubled Assets Relief Program, to help struggling homeowners and neighborhoods as the economy worsens.

Frank said “the program is one where money is provided to communities to buy-up property that was foreclosed.”

However, committee Republicans said that the program will continue to add to the massive national deficit. They also criticized the plan because it circumvents the appropriation process by taking $6.2 billion directly from the general fund, a procedure they say violates the Constitution.

“There seems to be a competition by Democrats, especially in this committee, who can come up with the most outlandish way to spend tax payer’s dollars,” Rep. Scott Garrett (R-N.J.) said. “The current proposal is to take the TARP program and turn it into something of a Madoff like Ponzi scheme.”

Frank plans to fund “TARP for Main Street” with money that was originally appropriated for bank bailouts. Some $68 billion has been given back by banks who did not need the money. Frank believes the money should be “recycled” and given to struggling homeowners.

TARP originally appropriated $700 billion in emergency bailouts as a measure to stabilize the financial markets.