Alright, so we’re talking about the largest appropriation of taxpayer dollars (and/or printed money) in US history here. $700 billion! And we even have to “urge” transparency and accountability? I’d like to say, “I can’t believe it” but unfortunately I can. Folks, this is what this blog is all about. We have the most irresponsible, flippant and crooked government and Congress that I have ever seen and probably in our nation’s history.
These collective officials have the gall to spend $350 billion of our tax dollars without demanding strict accountability. The committee they selected to be this “watchdog” has to come out and say “hey, we’re here to do this and you’re not letting us hold you accountable and you’re not being transparent about where this money is going.” Unreal… If only it was truly not real. Read the story below from the Wall Street Journal.
TARP Oversight Panel Urges Transparency and Accountability
WASHINGTON — U.S. lawmakers should demand more accountability from the government’s $700 billion financial rescue package before releasing the second half of the funds, the head of the program’s watchdog panel said Friday.
“We would urge Congress to consider the accountability and transparency questions, the question of whether money is going to be used for foreclosures, and the overall strategy issues as part of any additional requests made for more money,” said Harvard Law School Professor Elizabeth Warren, who chairs a bipartisan panel charged with overseeing the Treasury Department’s Troubled Asset Relief Program.
The Obama administration is already looking at a broad revamp of the program, which has faced criticism from Democrats and Republicans over its implementation. Obama’s team is expected to launch a major program to prevent foreclosures. House Financial Services Committee Chairman Barney Frank (D., Mass.) said he is working with the Obama administration to try and come up with restrictions on how the second installment of the fund is used, including aid to cities.
Ms. Warren said she was “very pleased that the incoming administration is focused on these issues.”
The Obama’s administration will likely work closely with congressional leaders before asking for the rest of the TARP money, as Congress can pass a resolution disapproving of any request. President-elect Barack Obama could veto any disapproval resolution, but that could prove politically risky and unsettling to markets.
“The panel’s initial concerns about the TARP have only grown, exacerbated by the shifting explanations of its purposes and the tools used by Treasury,” the report said. It said Treasury had “not yet explained its strategy” for stabilizing the financial markets.
The report said long and short-term credit spreads suggest Treasury has effectively forestalled a financial collapse by injecting billions of dollars into the financial system. Still, the panel suggested that the efforts have “not affected liquidity in credit markets or reassured the capital markets that large financial institutions are strong credits.”
“Although half the money has not yet been received by the banks, hundreds of billions of dollars have been injected into the marketplace with no demonstrable effects on lending,” the document goes on to say.
The report faulted Treasury on a variety of fronts, saying it has: no ability to ensure banks lend the money they’ve received from the government; no standards for measuring the success of the program; and that it ignored or offered incomplete answers to panel questions.
These shortcomings, the report suggests, could undermine the goal of various programs. “For Treasury to advance funds to these institutions without requiring more transparency further erodes the very confidence Treasury seeks to restore,” the report said.
The bipartisan panel reserved its most strident criticism for Treasury’s approach to dealing with the foreclosure crisis at the root of the ongoing economic turmoil.
“The bailout money doesn’t require a specific approach,” Ms. Warren said. “It entrusts Treasury with developing an approach, and that’s what Treasury should be doing.”
Treasury officials debated whether to use part of the TARP program to prevent foreclosures but ultimately decided against it, worried about any program’s effectiveness and the possibility it would discriminate against homeowners who’ve been struggling to make their mortgage payments.
They have instead relied on industry-led efforts by Fannie Mae, Freddie Mac and others to voluntarily modify troubled loans into more affordable products.
Additionally, the report faulted Treasury for not explaining why it declined to force all TARP recipients to adopt a Federal Deposit Insurance Corp. mortgage loan modification plan. Citigroup Inc. had to agree to use the program to streamline loan changes as part of its help from the government in November.
“Treasury’s refusal to answer this question is one of the most troubling aspects of their letter,” the report said of the Dec. 30 letter sent by Treasury to the panel in response to submitted questions.