Questions, Doubts Loom Over Bailout Money

Lawmakers Urged To "Take A Very Hard Look" At How Banks Use The Funds

(CBS/AP)  President-elect Barack Obama's economic team is broadening the mission of the $700 billion bailout for the financial sector, aiming to unfreeze credit for homeowners, consumers, small businesses and local governments.

The overhaul is aimed at the $350 billion remaining in the Troubled Asset Relief Program and comes amid mounting criticism from lawmakers and watchdogs that the Bush administration has administered the money in an inconsistent way and has not made banks accountable for the money.

The head of a congressional panel overseeing the $700 billion bailout program said Friday that lawmakers need to "take a very hard look" at how banks have used the money and she welcomed Obama's attempts to better define the program's mission.

Obama's selection for Treasury secretary, Timothy Geithner, is developing a "comprehensive set of investment principles," an Obama transition official said Friday. The official, speaking on the condition of anonymity because the plan has not yet been fleshed out, said the economic team will include measures to mitigate rising foreclosures and will place tougher conditions on financial institutions that receive the money, including limits on executive compensation.

With 11 days left before Obama is sworn in as the nation's 44th president, the task of requesting Congress for access to the remaining funds will now likely fall on the new Obama administration.

Geithner is expected to face a confirmation hearing before the Senate next Thursday and he can count on being quizzed vigorously on his TARP proposals.

Though the Obama team is not offering any specifics, the mere fact that it is setting goals for the money won support from the head of a congressional panel that is charged with overseeing how the money is being spent.

"These are powerfully important initiatives," said Harvard law professor Elizabeth Warren. "I'm very pleased that the incoming administration is focused on these issues."

She offered no specific advice on how to free up more credit. "It's going to take a variety of tools," she said. "They may have to move through multiple approaches."

The Congressional Oversight Panel she heads released a report Friday featuring questions about how banks are spending taxpayer money, how the money will combat the rising tide of home foreclosures and Treasury's overall strategy for the rescue.

---

Click here to view the Treasury Dept.'s December bailout report

---

But Treasury's Dec. 30 response "did not provide complete answers to several of the questions and failed to address a number of the questions at all," said the panel's second report.

The new document cited an Associated Press investigation that found none of the banks was willing to disclose what they were doing with hundreds of billions of dollars distributed through direct injections of federal money.

"For Treasury to advance funds to these institutions without requiring more transparency further erodes the very confidence Treasury seeks to restore," it said.

Appearing Friday on ABC's "Good Morning America," Warren said that Treasury "didn't put any tracking mechanisms on it."

"They didn't tell the banks what they had to do in order to get the money. It might be used for lending, it might be used to buy other banks ... Or it might just be stuffed in vaults and left there," she said.

"I think that Congress may want to take a very hard look at that question," Warren added. "Ultimately, we don't have a badge, don't have a gun. It's up to Congress."

"In my view, the heart of this problem started with the housing bubble and the mortgage foreclosure mess and in my view, that's where the solution should start as well," Warren said.

Most of the panel's report argues that better responses to unanswered questions are "essential" and explains why it believes Treasury's earlier responses were insufficient.

"Treasury has still not explained precisely what it sees as the problem," reads one assessment of a response deemed inadequate.

At several points, the report tartly explains the meanings of simple terms such as "strategy" and "oversight."

Referring to a question of why Treasury has required Citigroup, but not other firms that got money, to modify mortgages, the report says: "Treasury's refusal to answer this question is one of the most troubling aspects of their letter. The panel intends to do more fact finding on this matter."

Line after line of the column marked "Treasury Response" says simply, "No response."

The panel repeatedly states its reluctance to take Treasury's reassurances at face value.

"Treasury may be 'confident' that it is 'pursuing the right strategy to stabilize the financial system and support the flow of credit to our economy,' but once again, the function of oversight is to evaluate that claim," the report reads. "The question remains unanswered."

The panel's next official action will be a public hearing next Wednesday.

[spiritwalk]

Since everyone pretty much agrees that the bailouts are not working. Why don''''t we bailout the average American citizen now? That would be the only way to really get the economy rolling. The banks are just hording it and the bonuses continue to fly out the door so it needs to be stopped NOW! Financial institutions have been ripping people off for years. They don''''t need any more of OUR money.
Posted by endrepubs
-----------------------------
What you do not understand is the basic idea of the circulation of money in the economy.
The American people are the voters and it is their vote that puts the politicians in office. However, bailing out the voters is not economically cost efficient.
Say that there are roughly 100 million voters and you want to give the voters a "bailout" of $100 million. each person would get $1. People are not going to vote for anyone because they were given $1.
However, if you give the financial institutions a "bailout" of $100 million they will kick back $25 million in campaign contributions in order to buy air time to convince them to give up their vote for nothing.
The problem with your idea is that you think that you are the one that owns and should profit from your vote. You are only holding the vote for the people that own that vote and that isn''t you. You are only there to be an obedient worker, believe what you are told and vote the way your bosses, your unions and your churches tell you. it is they who will get the money for your vote.

[payasyougo]

"Questions, Doubts Loom Over Bailout Money
"Lawmakers Urged To "Take A Very Hard Look" At How Banks Use The Funds"
----

Lawmakers were "urged" to not pass the $850B bailout package in the first place by more than 80% of the voting public and they did it anyway. What makes anyone think those same lawmakers will investigate where the money went when there is a great possibility that it was not spent properly.

And now spending w/ a larger government is their only answer.

They just keep ignoring the will of the people.

95% of the economy would probably be on the mend by now if the government hadn''t intervened to "save" that less than 5% of the irresponsible. Six months savings for living expenses was probably sufficient.

Every action the government is taking is prolonging and exasperating this recession. And it''s spreading the pain to everyone.

The government is the problem, not the solution.

[spiritwalk]

The American taxpayer deserves to know where every dollar went.
Posted by WDRussell1

---------------------------------------------
No they do not!

They didn''t care where the money was coming from when it was coming from the black slaves, the Native Americans, the Appalachian coal miners of a hundred other groups. When those groups asked where their things went the American people said "Shut the f*** up" and they took all they could get.
Now that they are the ones having had everything taken from them that they took from everyone else they ought to be satified getting the same explanation they gave. Shut the f*** up.

[wdrussell1]

This bailout and the billions for Iraq sould be seen as the same.
The American taxpayer deserves to know where every dollar went.

[spiritwalk]

Ronald Reagan''s idea that ''the market will regulate itself'' was as naive as Nancy Reagan''s idea on drugs of "just say no".
How any grown person could have thought that greed was not the motivating factor and theft not the preferred method of acquiring wealth in the market is beyond me? But the majority of people believed it.
If anyone questioned the idea that it wasn''t going to work then Reagan would stand in front of the flag saluting and the people cheered and began wearing "President for Life" t-shirts and naming airports after him.
Now, 20 years later people are finally realizing that the whole financial structure is based on greed and manipulation and the Regan image was just a dream. Unfortunately, they are not waking up, they are just letting themselves have another dream.
The Blagojevich situation should be a wake up call, but it won''t be. This new "CHANGE" dream is coming out of a political system that is no less motivated by greed and corruption than the financial system. Instead of this messiah being portrayed standing in front of the flag saluting his face is on a coin with his "kind eyes".
People are falling for the same old BS, wrapped in a different package. 20 years from now they will be standing there, screwed again, looking for someone to blame and ready to go off into another dream. The people will never wake up.
To quote Pogo Possum "We have met the enemy and he is us"

[wardoglrs]

Folks, it''s simple.

1. Bernie Madoff starts a pyramid scheme which succeeds in generating vast sums of profit for its early investors for almost 15 years.

2. Many of Madoff''s investors are pro-Israel foundations and PACs, or individuals who donate to pro-Israel foundations and PACs.

3. The pro-Israel foundations and PACs donate heavily to the campaigns of those candidates willing to sell their souls to Israel for campaign cash.

4. THEREFORE, those pro-Israel politicians in Congress won their seats in part using stolen money.

5. THEREFORE, the Madoff pyramid, until it collapsed, was a major funding mechanism that allowed the Israeli lobby to buy the US Government for the benefit of Israel and to the detriment of the American people.

[ms1-1-1]

vexit

GOOD POST! My issue 1976 my salary was $8 per hour this is correct me if I am wrong 2009? You''re going to tell me that the salary is well below $8 per hour in 2009, excuse me? What did I miss all these past decades gone by?

Someone is pulling $hit on the American people.

[starleo146]

The d-crats will blame only the incompetent Paulson, but the blame also goes to them for failing to include in the legislation appropriate requirements on recipients for full reporting and disclosure on the use of taxpayer money and appropriate penalties for misuse.

/

Posted by USGENERAL at 01:18 PM : Jan 09, 2009
+ report abuse

It was part of the bailout bill congress passed, but as usual they took that 350billion and did what they wanted to with it and are now finding it hard to fess up where and how much, so what else is new? Obama isn''t even sworn in and they want ever "T" crossed before he will help this country, who is doing all the crying Mitch Mc Connell, Pelosi, and Reid will Congress just shut up and do this country proud for once.

[gretagreen]

I feel so powerless . . .
And so angry.

[vexit]

The greed comes from the International Banking cartels and the elitists that run them. The control the Council on Foreign Relations which was created by teh Rockefellers and Morgans. They own the Federal Reserve and other country Central banks. They control the economy and stock markets. They caused the great depression. They are doing it again. The are also the shadow war lords behide the scenes. The are placed in every facit of government. Do some research. Its scary. There goal is One World Order ruled by the rich. a communism of sorts. Not a nice place for freedom loving people. First the euro then the amero... One Communistic World Order.

[antoniof123]

Posted by USGENERAL at 01:18 PM : Jan 09, 2009

You statement has already been laid down by the receipent of the noble prize for economics. As for as the economic community is concerened he is one of the god of economic and has proven that you man Phill (America is a nation of whiners) is the king of deregulation.

So stop wasting our time with stuff you get from the shoch jocks like Rush, and Sean, and Bill and Glen, and of course our favorite Ann wing nuts.

God neocons are dumber than dirt.

[blog_fever]

Posted by USGENERAL at 01:18 PM : Jan 09, 2009

This is the biggest load of cr@p ever! GOP (greed over principle) is just as much to blame as anyone else. Get over yourself you pathetic finger pointer.

[blog_fever]

This whole thing has turned out to be a big mockery of our government. Bailing out our greed is becoming more and more of a hassle than a solution.

[usgeneral-2009]

.
TARP has been another KATRINA.

The d-crats will blame only the incompetent Paulson, but the blame also goes to them for failing to include in the legislation appropriate requirements on recipients for full reporting and disclosure on the use of taxpayer money and appropriate penalties for misuse.

/

[lochlan-2009]

There is no question it is being stolen by the very people who initiated this scam. Don'' forget our representatives had to knowingly pass legislation to make this, formerly illegal crime, legal, and then stand by and wait for years while the whole scam played out. If you can''t see this required the full backing and support of the U.S. government representation, and the silence of the media, then there is no hope for you anyway.