House lawmakers discourage extension of bank bailout

Twenty-eight House lawmakers wrote Thursday to Treasury Secretary Timothy Geithner requesting that he not extend the Troubled Asset Relief Program that is slated to expire at year's end amid indications that the Obama administration will renew it for 10 months.

Twenty-one Democrats and seven Republicans wrote to Geithner that the program should end on Dec. 31, citing several reasons, including poor oversight, funds that were allocated outside their original purpose of bringing more liquidity to credit markets and a belief that no more taxpayer money should be used to prop up banks.

"It is essential that our economy continue to rebound, but the TARP program has been flawed from the start and further spending in this program to bail out banks on the backs of working families across the country is not the best way to help our economy, or a good use of taxpayer dollars. Our financial markets must be stabilized and rebuilt while protecting American taxpayers," the members wrote. Rep. Paul Hodes, D-N.H., organized the letter.

The Obama administration faces a political quandary in renewing the program, given bailout fatigue in Congress -- especially actions the Federal Reserve has taken without any legislative approval, such as its $182 billion rescue of insurance conglomerate American International Group.

But Geithner has indicated that the administration might renew the program through Oct. 3, 2010, to ensure financial markets do not backslide.

"I think the classic mistake people make is they declare victory too soon; they put on the brakes too early; they withdraw these things and then the system has to go back and build more insurance against the risk of a bad outcome, and that could intensify the recession or reignite [it]," Geithner told the TARP Congressional Oversight Panel on Sept. 10.

The Obama administration points out that only $365 billion in TARP funds have been allocated and that more than $70 billion has been repaid. "We have been cautious about spending TARP funds so that we to get maximum impact for every taxpayer dollar invested," said Meg Reilly, Treasury spokeswoman.

At a Senate Banking Committee hearing Thursday, Herbert Allison, Treasury's assistant secretary for financial stabilization, told the panel that "it would be premature" for him to discuss what the administration may recommend as far as extension. Senators were not amused. "Your testimony has been a little bit amorphous," Sen. Judd Gregg, R-N.H., told Allison.

"We need to get some answers," agreed Banking Committee Chairman Christopher Dodd, D-Conn.

Dale Eisman contributed to this report.

Stay up-to-date with federal news alerts and analysis — Sign up for GovExec's email newsletters.
FROM OUR SPONSORS
JOIN THE DISCUSSION
Close [ x ] More from GovExec
 
 

Thank you for subscribing to newsletters from GovExec.com.
We think these reports might interest you:

  • Going Agile:Revolutionizing Federal Digital Services Delivery

    Here’s one indication that times have changed: Harriet Tubman is going to be the next face of the twenty dollar bill. Another sign of change? The way in which the federal government arrived at that decision.

    Download
  • Cyber Risk Report: Cybercrime Trends from 2016

    In our first half 2016 cyber trends report, SurfWatch Labs threat intelligence analysts noted one key theme – the interconnected nature of cybercrime – and the second half of the year saw organizations continuing to struggle with that reality. The number of potential cyber threats, the pool of already compromised information, and the ease of finding increasingly sophisticated cybercriminal tools continued to snowball throughout the year.

    Download
  • Featured Content from RSA Conference: Dissed by NIST

    Learn more about the latest draft of the U.S. National Institute of Standards and Technology guidance document on authentication and lifecycle management.

    Download
  • GBC Issue Brief: The Future of 9-1-1

    A Look Into the Next Generation of Emergency Services

    Download
  • GBC Survey Report: Securing the Perimeters

    A candid survey on cybersecurity in state and local governments

    Download
  • The New IP: Moving Government Agencies Toward the Network of The Future

    Federal IT managers are looking to modernize legacy network infrastructures that are taxed by growing demands from mobile devices, video, vast amounts of data, and more. This issue brief discusses the federal government network landscape, as well as market, financial force drivers for network modernization.

    Download
  • eBook: State & Local Cybersecurity

    CenturyLink is committed to helping state and local governments meet their cybersecurity challenges. Towards that end, CenturyLink commissioned a study from the Government Business Council that looked at the perceptions, attitudes and experiences of state and local leaders around the cybersecurity issue. The results were surprising in a number of ways. Learn more about their findings and the ways in which state and local governments can combat cybersecurity threats with this eBook.

    Download

When you download a report, your information may be shared with the underwriters of that document.