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Congress Sings the Bailout Blues
Posted on Jan 18, 2009
Want to know where the $350 billion banking bailout went and why it hasn’t done a bit of good? Read, and weep over, this little-noticed report from the congressional panel set up to monitor the Treasury Department’s distribution of our taxpayer funds.
The money has done little to ease the credit crunch and has given no help to those facing foreclosure. Instead, it has been used to fatten the accounts of the very banks that got us into this mess. In the face of such devastating criticism of the Treasury Department by a panel set up by Congress to monitor the spending, our representatives went right ahead and allocated another $350 billion.
The executive summary of the Congressional Oversight Panel (COP) report follows. For the full report, click here.
In its first report to Congress on December 10, 2008, the Congressional Oversight Panel (COP or the Panel) posed ten basic questions – in effect asking for an explanation of the U.S. Department of Treasury’s goals and methods for the Troubled Asset Relief Program (TARP). The Panel’s questions, in turn, included a number of subsidiary questions, which sought additional details from the Treasury. In total, the Panel sought responses to 45 separate questions about the execution of the authority granted to Treasury under the Emergency Economic Stabilization Act (EESA) and the $350 billion in taxpayer funds that has been “effectively allocated” under that program. On December 30, 2008, Treasury responded to the Panel with a 13-page letter. While the letter provided responses to some of the Panel’s questions and shed light on Treasury’s decision-making process, it did not provide complete answers to several of the questions and failed to address a number of the questions at all. To gain a more complete understanding of what Treasury is doing and why, the Panel asks Treasury to provide additional information clarifying its earlier responses.
Square, Site wide
In order to exercise its legally-mandated oversight functions, the Panel has initiated a number of fact-finding efforts and independent investigations that will be the subject of future reports. But the Panel’s independent work does not eliminate the need for Treasury to respond to the Panel’s questions. Some of these questions can be answered only by Treasury (e.g., Treasury’s strategic plans) and others seek to clarify what appear to be significant gaps in Treasury’s monitoring of the use of taxpayer money (e.g., asking financial institutions to account for what they have done with taxpayer funds).
To ease the burden on Treasury and to make it clear precisely which questions remain to be answered, the Panel has constructed a grid with its original questions and Treasury’s responses. Although many questions remain outstanding, the Panel highlights four specific areas that it believes deserve special attention:
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