TARP Challenges

Senator Max Baucus (D-Mont), Chairman of the Committee on Finance, stated that an oversight of the Troubled Assets Relief Program (TARP) a much needed action. “This is an enormously complicated new program. The money involved is mind boggling; indeed, it is surreal,” said Baucus at a hearing held by the Committee on Finance on TARP Oversight: A Six Month Update.
Among the witnesses at the hearing were Elizabeth Warren, Chairwomen on the Congressional Oversight Panel, and Neil Barofsky, Special Inspector General for the TARP program.

Warren stressed the importance of clear goals and a well structured program, to make it easier to overview and monitor it. “In a crisis, transparency, accountability and a coherent plan with clearly delineated goals are necessary to maintain public confidence and the confidence of the capital market,” said Warren.

Barofsky discussed in his testimony the risk of increased criminality, when the outlay of a large sum of money is being exposed in a short time period. “If, by percentage terms, some of the estimates of fraud in recent government programs apply to the TARP programs, we are looking at the potential exposure of hundreds of billions of dollars in taxpayer money lost to fraud,” said Barofsky.

Senator Chuck Grassley (R-Iowa), Ranking member of the Committee on Finance, said that he had his doubts about the TARP program and also the fast paced it had through Congress. “Millions continued to lose jobs and homes, which makes me wonder about the program’s effectiveness. But you can not measure effectiveness when you don’t know what the goals and objectives of a program are, or how the program is being run,” said Grassley.