Congressman Darrell Issa (R-Calif.) says it is important that people pay health care costs that are fair, especially those who are self-insured or uninsured. He adds that the current system drives people to acquire insurance plans that are more expensive than what they can afford. (:71)
Annie Berman – Talk Radio News Service
Taxpayers are not being told what is happening with the money they have involuntarily invested in the Troubled Asset Relief Program (TARP). Treasury Special Inspector General Neil Barofsky testified to the Oversight and Government Reform Committee that the most important recommendation that he could give to the committee would be a push for more transparency.
Tuesday’s hearing was a part of a series of hearings in which the TARP program is assessed and new developments of the program are reported to the committee.
Barofsky made sure that he was able to answer all questions honestly and thoroughly, as he recognized the concern that the committee has over transparency.
“The full transparency that we [the committee] asked for, which this President and this administration has promised is being blocked by the bureaucracy that often seems to say ‘just trust us and we will deliver,’” said Ranking Member Rep. Darrell Issa (R-Calif.).
Issa also brought up the staggering $23.7 trillion figure that has everyone on the Hill buzzing, and possibly a little scared. Issa asked Barofsky if he ever said in his reports that the U.S. would lose such an enormous amount of money in assurances and insurances.
“Of course not, and we explicitly point out in the report the existence of collateral…If every program is maximized to the greatest extent possible, that’s what that number is.”
In the last 3 months of the TARP, there have been an expansion of programs including expansion of the mortgage modification program to which approximately $18 billion has been allocated. There have also been more than $70 billion in TARP paybacks, and the Public Private Investment Program (PPIP) was launched with an allocation of approximately $30 billion in taxpayer money.
“Unfortunately, in rejecting SIGTARP’s basic transparency recommendations, TARP has become a program in which taxpayers are not being told what most of the TARP recipients are doing with their money, have still not been told how much their substantial investments are worth, and will not be told the full details of how their money is being invested,” said Barofsky in his opening statements.
Barofsky’s position was created to specifically oversee what happens to TARP funds. He and his office carry out audits on institutions that have received TARP funds, and carry out investigations of issues concerning securities fraud, suspected accounting fraud, insider trading, mortgage service misconduct, mortgage fraud, public corruption, false statements and tax investigations. These investigations were developed through tips or leads provided anonymously to the SIGTARP Hotline (877-SIG-2009) and online at www.SIGTARP.gov.
Rep. Darrell Issa (R-Calif) laments the failings of the American Reinvestment Recovery Act, saying the Obama administration’s promise that the bill would create or save 3.5 million jobs and keep the unemployment rate from rising above 8 percent hasn’t come true. (0:16)
By Annie Berman – Talk Radio News Service
It is still unclear if the American Recovery Reinvestment Act (ARRA), also known as the stimulus bill, is helping states create and retain jobs, despite the current 9.5 percent unemployment rate.
This is the third in a series of hearings the Oversight and Government Reform Committee has held to discuss the ARRA, specifically to review the state and local uses of Recovery Act funds and the Government Accountability Office’s second bi-monthly report of those allocations.
According to Robert Nabors, Deputy director of the Office of Management and Budget, the stimulus bill is having a positive impact.
“The Recovery Act is making significant resources available to states that are struggling…funding has relieved pressure on state budgets, allowing them to provide better service and avoid job cuts,” Nabors said.
Nabors also stressed that states should not rely on stimulus money in
the long term.
“We always view the Recovery Act as a short term effort. The President has been very clear that we need to get the economy jump started. We need to expend resources now to actually get them started. But over the long term, the funding levels that are contained within the Recovery Act should not be thought of as permanent,” said Nabors.
The three governors that testified at today’s hearing maintained that direct aid to states provided by the stimulus plan has greatly helped their states’ economies through job creation and projects such as highway restorations and solar energy panels for buildings.
“Things are happening,” said Pennsylvania Gov. Edward Rendell (D). “Construction and manufacturing. It’s working. And the good news is it’s going to get better…you are going to see a huge impact. I think the stimulus is going to work. Any judgment on it is premature. Let’s see how it works. I’d like to see a second stimulus dedicated solely to infrastructure.”
Rep. Darrell Issa (R-Calif) voiced strong opposition to the possibility of a second stimulus bill, even though he voted in favor of the first.
“The U.S. economy lost 433 net jobs in June bringing the unemployment rate to 9.5%,” said Issa. “These job losses pump on the heels of other declining economic indicators that bring total American job losses since President Obama took office to 2.6 million…fool me once shame on you, fool me twice, shame on me.”
By Kayleigh Harvey – Talk Radio News Service
Talk Radio News Service will be liveblogging the House Oversight and Government Reform Committee hearing with AIG CEO Edward Liddy today at 10:00. Refresh this page for updates.
AIG Chairman and CEO, Edward Liddy, will come before Congress today for the second time since it was revealed, in March, that AIG paid out $120 million in bonuses after receiving a $85 billion from the government bailout package.
Chairman of the Committee Edolphus Towns (D-N.Y.) said, “Eight months ago, the American taxpayer came to the rescue of AIG with an $85 billion bailout. That was followed by more money in November, more again in December and more money still in March. The taxpayers have now provided more than $180 billion in financial assistance to AIG.
“A few days ago, we learned that the aIG has put together a plan called Project Destiny. Project Destiny is described as “a multi-year roadmap for the restructuring of AIG. I requested a copy of this plan, but AIG says that disclosing the plan “would undermine its efforts to achieve its goals for the benefit of American taxpayers.” AIG says it is consulting on the issue with the New York Fed. In other words, “trust us.” Everything will be alright.”
Adding, “I was surprised and disappointed to see that AIG continues to argue for secrecy. In his testimony, Mr. Liddy seems to argue that criticism of AIG will somehow hurt the company. Again we are hearing, “Trust us.” But we are not willing to let $180 billion go just on trust. We will questions, we will inquire, we will verify, and we will not hesitate to probe every aspect of AIG management and operations to protect the taxpayer’s investment.”
Ranking Member, Darrell Issa (R-Calif.) said, “I want to acknowledge that none of this is the trustees’ fault, they are simply operating within the organization that was created by others, and no doubt do so out of patriotic spirit of public service.”
Adding, “The American people have a right to know what is being done with their money.”
In his opening testimony Edward Liddy said, “We are working hard to determine the destiny of the component parts of AIG.”
Adding, “We intend for taxpayers to realize the fullest possible value from every asset disposition, and we intend that every company that emerges at the end of restructuring will be strong, transparent, and a credit to all its owners.
In particular, we are transferring two major foreign life insurance companies – ALICO and AIA – into special purpose vehicles in exchange for a substantial reduction in AIG’s debt to the Federal Reserve Bank of New York. We expect to complete the contractual arrangements for these in the near future.”
Liddy added, “We recognize our responsibility to work hand in hand with the government to preserve that value, and I assure you that is our goal. We continue to welcome a frank and open dialogue with Congress on our progress in restructuring, so that you can be in a position to support our efforts. That is essential and I will help us to preserve the value of AIG franchise for the benefit of AIG’s stakeholders, the American taxpayer most of all.”
Asked by Towns, “Can you confirm that AIG will not require any other additional government money?”
Liddy, “What I can say is we will do our best not to require any additional funding…that answer is very dependent on what happens around the financial globe…I can’t give you a guarantee on that. I can’t control what happens in the global market.”
Towns asked Liddy to provide a copy of ‘Project Destiny’ by the end of the day.
Liddy responded by saying, “I will do my best.”
Liddy will consult with AIG lawyers on this issue as he fears that releasing details of ‘Project Destiny’ could provide access to marketing information to their competitors and then impact AIG’s ability to pay back taxpayers money.”
Towns closed by saying, “Do you honestly believe you have a right to prevent Congress from reviewing how the taxpayers money is being spent?”
Frustrated at Liddy’s response that he would need to talk to his counsel before providing Congress with details on ‘Project Destiny,’ Issa gave Mr. Liddy a chance to talk to his attorney sitting behind him.
After conversing for less than two minutes, Mr. Liddy concluded that it there would be limitations to what can be provided as there is “commercially sensitive” information in the plans that AIG would not want competitors to see.
Congressman Paul Kanjorski (D-Penn.) said, “Do you have any opinion whether it would be helpful…if in someway we developed a Federal Insurance charter?”
Liddy replied, “There needs to be someone that looks at systemic risks.”
Congressman Brian Bilbray (R-Calif.), “Are you hoping to be able to pay back the taxpayer before the ceiling falls in….How long will it take to pay the taxpayers back?”
Liddy replied, “Somewhere between three and five years. What makes the answer so difficult is how strong will the economy be worldwide and how strong will the financial markets be worldwide.”
Bilbray added, “When will you start repaying debt?”
Liddy replied, “As soon as possible….hopefully in a matter of months assuming we get all the Federal approval. ”
Congressman Elijah Cummings (D-Md.) asked, “What can you tell them [people who have lost jobs and homes] about what they can expect to see as they see foreclosures signs in front of their houses and businesses?
AIG is looking at its contracts to ensure bonuses are paid on performance basis. Liddy said, “If there are bonuses you earn them.”
Congressman Jeff Fortenberry (R-Neb.) asked Liddy to explain to the public what exactly AIG is.
Listing several branches, Liddy said, “It’s an insurance company with a few exceptions.”
Liddy told the committee, “My time today is focused on today and tomorrow and less on yesterday.”
Fortenberry asked Liddy about new figures on AIG bonuses differing from those provided to Congress in March.
It has now been revealed that AIG paid $454 million to bonuses in to its employees in 2008, compared to the $120 million figure released in March.
Apologizing for any confusion on how much was paid exactly for bonuses. Liddy said, the discrepancy on the amount occurred when they were asked by Congress about different type of bonuses, specifically cooperate bonuses.
Appearing frustrated and angry at Liddy’s responses throughout the hearing, Congressman Dennis Kucinich (D-Ohio), told Liddy that AIG’s behavior was “unacceptable.” Adding, “You cheated people who saved lives, who save our children, what are you going to do about this?”
Liddy said he would work with Congress and offered to meet with Kucinich after the hearing.
Kucinich told Liddy that until this matter is resolved “Congress is not going to let you go,” shouting that this was “unacceptable” behavior. He told Liddy that Congress “will keep calling you back here,” until this issue was concluded.
Kucinich agreed to meet with Liddy following the hearing.
Congressman Jeff Flake (R-Ariz.) asked Liddy, “Can you tell us what the administration’s plans are with moving forward with AIG?”
Liddy said, “I cannot.”
Congressman William Clay (D-Mo.) asked, “Is AIG really too bog to fail and has it already failed?”
Liddy said, “I would point out to you that this quarter’s figures showed that losses for this quarter were not 62 billion…it was 4.3 billion, substantially less than it was in the first quarter of 2008. It’s a very complicated institution. It’s a very complicated operation.”
Hearing was suspended until 12.15pm as Congress was called to vote.
Congressman Stephen Lynch (D-Mass.) said he was “disappointed” with Mr. Liddy as he failed to address the question both in this written and oral testimony, relating to where the taxpayer’s money is going. Lynch said, “It’s a new ball game. One of transparency and accountability.”
Liddy replied, “The last time I was here we provided a very exhaustive document that explained where all the taxpayers money has gone…it was a very exhaustive analysis that explains that in some detail. I thought we had already answered that.”
Lynch said, “We are going to have to have you back up this. I am with Kucinich on this. We will not be rolled on this. When we call you up here and ask you a question, we want you to answer the question. ”
Congressman Gerry Connolly (D-Va.) asked, “With respects to the bonuses, how many people left the company?
Liddy said, “On the FP sector we had about maybe 10 to 12 to maybe 15 resignations…don’t know if the resignations are over yet.”
Congressman Lynn Westmoreland (R-Ga.) asked Mr. Liddy to get and provide Congress with the number of lawsuits AIG are facing and to find out whether news reports on binding arbitration are true.
Congresswoman Marcy Kaptur (D-Ohio) asked, “Have you paid the taxpayers back any of the money they have lent you to date?”
Liddy responded, “Yes.”
Kaptur: “How much?”
Liddy: “Several billion dollars”
Kaptur: “Several Billion?”
Liddy: “Yes”
Kaptur asked for a list of dates, sums to be submitted for the record. Liddy agreed.
Kaptur then questioned Liddy about his connections with Goldman Sachs which revealed that Mr. Liddy has shares to the market value of $3 million from Golden Sachs.
Congressman Michael Turner (R-Ohio) wants to work with AIG and Mr. Liddy to look at how to improve mortgage back loan to value ratios. Turner fears that if this is not addressed then, “I believe that what we are going the see is the largest theft or fraud in history.”
Congresswoman Jackie Speier (D-Calif.) told Liddy, “We are all scratching our heads how can you possibly pay back the taxpayers?”
Liddy said, “It is possible…as I said you before it depends on market circumstances.”
Kucinich said, “Is it true that even if the United States took over AIG 100 per cent these bonuses would still be awarded?”
“No. We have been looking at how we keep people spirited but how we keep in line with Federal regulations.”
Kucinich read a letter sent to employees which asked them to keep bonuses confidential. Kucinich asked Liddy, to inform Congress about any future bonuses.
Towns asked Mr. Liddy to remember that the American public wants to know why a company that contributed to our current economic crisis paid out bonuses that rewarded failure.
Kaptur asked anyone in the committee room currently under contract with AIG to stand – 6 people stood. Kaptur has asked for the details of their contracts.
Kaptur continues to probe into Liddy’s connections with Goldman Sachs. Asking the committee to obtain minutes from meetings Liddy attended.
Issa told Liddy, “Please do not think you will not be back before us if you cannot answer…what have the American taxpayers bought for $190 billion dollars?”
Adding, “Provide us with some understanding on how you will pay us back.”
Liddy said, “Assets values should be sufficient to satisfy all of what the company owes.”
Congresswoman Carolyn Maloney (D-N.Y.) asked, “Whether the life insurance sector of AIG needed a bailout?”
Liddy said, “The life insurance sector was solvent.”
Maloney asked, “Do you foresee that in the future that youl will not need any additional public money?
Liddy sighed saying, “Again, I would say that I certainly hope so.”
Towns in closing told Liddy that he needed to understand that the “American taxpayer is frustrated.”
Edward Liddy was able to leave the hearing at 1.36pm.
Michael Ruhl interviews Congressman Patrick McHenry (R-NC) and Congressman Jim Jordan (R-OH) about the concerns they have of White House Chief of Staff Rahm Emmanuel being placed in charge of the 2010 Census, a job normally overseen by the Secretary of Commerce. (03:10)
By Michael Ruhl, University of New Mexico – Talk Radio News Service
