- Special Sections
- Public Notices
Just two months ago the Congress passed the Financial Stabilization Package which was designed to stabilize the growing financial crisis currently facing our country. This legislation, which I voted against, created the Troubled Asset Relief Program, known as TARP, and gave the U.S. Treasury Department broad authority to distribute $700 billion of the taxpayers’ hard earned money with hardly any oversight and no accountability for the irresponsible behavior of the financial institutions that led to this very situation. This $700 billion price tag translates into a cost of nearly $8,000 for every family of four in the U.S.
While I disagree with the approach the Financial Stabilization Package takes and believe it is not the solution to our long term financial problems or our short term credit liquidity crisis, it has been signed into law and so I believe that Congress must ensure proper oversight of this extremely expensive program.
Earlier this month the Government Accountability Office (GAO) released a report on TARP detailing a complete lack of oversight of this program. The report concluded that the TARP funds were being handed out without adequate controls. This is not surprising considering the Treasury Department has already distributed – or made commitments to distribute – some $335 billion to a wide range of U.S. financial institutions. That means nearly half of the funds in the program were handed out before accountability measures were even enacted. This funding has been given to various financial institutions but not a single Chief Executive Officer (CEO) from any of the TARP participants has been called to testify before the House Financial Services Committee regarding their need for or use of the hundreds of billions of taxpayers’ dollars they have received. In fact, the application to receive funding from TARP is only two pages long and doesn’t even ask the purpose of the loan. This is in comparison to the eight page application package for a home loan and the eleven page application package to qualify for a student loan from the federal government.
I am encouraged that Congressional hearings are now being held to examine the root of our economic problems and to examine the Treasury Department’s execution of their new authority, including Assistant Treasury Secretary Neel Kashkari’s management of the program. Additionally, a Congressionally appointed oversight panel has been formed to ensure transparency and accountability of the TARP funds.
Our economy faces historic and unprecedented challenges. Nothing is more important to me than ensuring the future growth of our economy and job creation and we can all agree that Congress has a responsibility to act to ensure that credit, the lifeline of our economy, remains available to individuals, families, students, and small businesses all across this country. However, Congress also has a responsibility to ensure that the taxpayers are protected by ensuring proper oversight and transparency of any funds distributed from the Troubled Asset Relief Program.