congress watch

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Treasury’s Kashkari to testify in response to GAO report

December 10th, 2008 by selise

When TARP czar Neel Kashkari testified last month before Kucinich’s Domestic Policy Subcommittee, in what I can only describe as an example of hell freezing over, Kuchinich and Issa joined forces to expose Kashkari and more generally the entire TARP program as a sham. Favorite line from that hearing was:

kucinich to kashkari: no one questions that you are working hard. our question is who are you working for?

Today at 10 am, Kashkari returns to testify before Barney Frank’s Financial Services committee to defend the TARP from criticisms contained in GAO’s recent oversight report. Frank’s press release described the report’s conclusions:

“The bad news was confirmation by the GAO in its first report about the program that Treasury has no way to measure whether taxpayer funds invested in banks are being used in accordance with the purpose of the law – to increase lending. The much worse news is Treasury’s response that it does not even have the intention of doing so.

“GAO recommended that metrics be developed to apply to how individual institutions are using their share of the 250 billion made available to them. Treasury’s extremely disappointing response is to engage in "further discussions on general metrics for evaluating the overall success of the capital purchase program in addressing the purposes of the EESA."

“By rejecting the GAO’s recommendation that measurement is needed and substituting a vague promise to "evaluate the overall success of the program," Treasury is coming very close to telling the institutions that they will be free to use the funds as they wish.

“Adding this blatant refusal to enforce any lending obligations on individual institutions the continued policy of ignoring the clear intent of the EESA to aid in the reduction of foreclosures put the Treasury perilously close to a breach faith with those who responded to the Bush Administration’s request to establish the program. A public hearing on the issues raised by the GAO report is now essential.”

Maybe we shouldn’t be surprised that this is what happens when a self-described "free market Republican" is put in charge of a $700 billion market intervention. Or that Kashkari was still in business school in 2002 and that before following Paulson to Treasury from Goldman Sachs where he appears to have worked in a completely unrelated field. Was there no one with more experience available?

10 amHouse Financial Services
Oversight Concerns Regarding Treasury Department Conduct of the Troubled Assets Relief Program This hearing comes following a report by the Government Accountability Office on the Treasury Department’s implementation of TARP. [see the 12/4/2008 GAO report, TROUBLED ASSET RELIEF PROGRAM Status of Efforts to Address Defaults and Foreclosures on Home Mortgage" and the 12/10/2008 GAO report, "TROUBLED ASSET RELIEF PROGRAM Additional Actions Needed to Better Ensure Integrity, Accountability, and Transparency" - selise]

Panel 1:

  • Gene Dodaro, Acting Comptroller General of the United States, U.S. Government Accountability Office
  • Neel Kashkari, Interim Assistant Secretary for Financial Stability and Assistant Secretary for International Affairs, U.S. Department of the Treasury

Panel 2:

  • Jeb Hensarling (TX-05), Congressional Oversight Panel under the Emergency Economic Stabilization Act
  • Elizabeth Warren, Leo Gottlieb Professor of Law, Harvard University, and Chair, Congressional Oversight Panel under the Emergency Economic Stabilization Act [see COP report, "Questions About the $700 Billion Emergency Economic Stabilization Funds" - selise]

Live streaming expected at CSPAN (direct real player links: CSPAN, CSPAN-2, CSPAN-3, CSPAN Radio) and the committee website. For later viewing see the CSPAN’S video archive.

x-posted at oxdown.

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