Better accountability needed for TARP funds

If there's one hallmark that should define the new Congress and the new Administration, it's that we are ushering in a new era of accountability for our government, our corporations, and ourselves. The era of blank-check bailouts is over.

President Obama said in his inauguration speech, "What is required of us now is a new era of responsibility — a recognition, on the part of every American, that we have duties to ourselves, our nation, and the world…This is the price and the promise of citizenship."

I am holding President Obama to that promise by asking him to adopt new accountability measures in using the second half of TARP funds. Last fall, Congress approved the Troubled Asset Relief Program (TARP), which authorized $700 billion to go to struggling lenders and financial institutions. But the first $350 billion was spent by the Bush Administration without any accountability or oversight; furthermore, it did not address the root problems of the financial crisis.

As middle-class families watched their retirement savings shrink and more jobs were lost, the first $350 billion simply disappeared in a black hole. This is totally unacceptable. Our current economic crisis was created in part by a lack of accountability in our financial and lending institutions, and the solution cannot be more of the same.

I opposed the bailout in the fall, and last week, I broke from my party's leadership to vote against releasing the second $350 billion. I also voted for a major set of reforms, the TARP Reform and Accountability Act (H.R. 384), which adds strict new accountability measures, closes loopholes, limits executive compensation, and requires transparency for the remaining funds. The legislation also requires that 30% of the funds be devoted directly to helping homeowners avoid foreclosure, finally getting to the root of the problem. It also forces large banks to report how government funds are being spent, limits executive bonuses for firms participating in TARP, and shifts some supports to local and community banks.

Along with other newly-elected members, I sent a letter to President Obama urging him to adopt these new, stringent accountability measures to make sure our taxpayer dollars are being spent wisely, effectively, and transparently to create jobs. Compared to last year's bailout, these common-sense accountability measures represent the change that voters demanded and that Virginia's working families deserve.

January 30 has been designated by the Internal Revenue Service (IRS) as Earned Income Tax Credit Awareness Day. More than 500,000 Virginia taxpayers took advantage of the Earned Income Tax Credit (EITC) and received more than $990,000,000 in refunds for the 2007 tax year; however, the IRS estimates that 20 to 25 percent of taxpayers eligible to receive the EITC did not claim this benefit and were unable to collect the tax credit they were rightfully owed last year.

The EITC is a refundable credit, and it has enjoyed broad bi-partisan support because it rewards work while helping those families most in need. The EITC is available to both married and single people, with or without children, but the credit is greater for families with children. For example, families with more than one child and an income of up to $38,646, or $41,635 for married couples filing jointly, may be eligible to receive a credit of up to $4,824.

In order to receive the EITC, eligible families must first file a federal income tax return. Taxpayers who qualify for the EITC also qualify for free tax preparation assistance through the IRS Free File Program. For information on the free tax preparation site nearest you, you may visit www.irs.gov, or call 1-800-829-1040.