House Panel Probes Handling Of Financial Meltdown

The new GOP chief of the House Oversight Committee kicked off the first of half a dozen investigations he's planned for the next three months into the Obama administration. Chairman Darrell Issa honed in on the administration's handling of the financial meltdown. Treasury Department officials defended the bank bailout for Wall Street, but their program for preventing home foreclosures for Main Street was slammed as a failure. The hearing lays the groundwork for GOP plans to repeal some financial regulations and reform the mortgage giants Fannie Mae and Freddie Mac.

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From NPR News, this is ALL THINGS CONSIDERED. I'm Michele Norris.

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And I'm Melissa Block.

The new Republican chief of the House Oversight Committee has vowed to take on half a dozen investigations in his first three months as head of the panel. California Republican Darrell Issa says everything from the WikiLeaks release of diplomatic cables to food recalls by the FDA will be under scrutiny.

Today, the largest target came first: the Obama administration's handling of the financial meltdown. NPR's Audie Cornish reports from Capitol Hill.

AUDIE CORNISH: New Chairman Darrell Issa was looking to shake things up, and he did it by toning things down. He told lawmakers they were not to make opening statements.

Representative DARRELL ISSA (Republican, California): For the purpose of all of us, including the freshmen, I want to just start off by listening first. I recognize that tradition is that we hold the members, or the witnesses here, for sometimes an hour through opening statements. That is a tradition that I intend to break.

CORNISH: But Democrats have spent the last few days sparring with Issa about proposed rules on his subpoena power and other procedures. Democrats like Ohio's Dennis Kucinich weren't going to make this easy.

Representative DENNIS KUCINICH (Democrat, Ohio): I've been in the Congress for 14 years, and I've never - it's just unprecedented that a ranking member not be permitted to give an opening statement or for a chair to dispense with opening statements. So the people - so the people know...

Rep. ISSA: Does the gentleman have a parliamentary inquiry?

Rep. KUCINICH: I asked - I didn't make a parliamentary inquiry. I asked...

Rep. ISSA: Then the gentleman is no longer recognized.

CORNISH: Today's inquiry focused on the $700 billion bank bailout fund, known as the Troubled Asset Relief Program, or TARP. It passed at the end of the Bush administration, but the panel's inquiry focused on how current Treasury officials have handled it.

The first witness, acting assistant treasury secretary Timothy Massad, was quick to praise the program. He said it's on track to recover billions of dollars and in the end may cost taxpayers $25 to $50 billion instead of $700 billion.

Mr. TIMOTHY MASSAD (Acting Assistant Treasury Secretary): I recognize that TARP has not been popular. There is good reason for that. No one likes using taxpayer dollars to rescue financial institutions. Nonetheless, sitting here today, more than two years after a bipartisan Congress passed the legislation that created TARP, it is clear that the program has been remarkably effective by any objective measure.

CORNISH: But the special inspector general for TARP, Neil Barofsky, said the program and the new financial regulations that followed have made markets comfortable with the idea that firms can be considered too big to fail and could be bailed out again.

And Barofsky called another financial rescue fund to help homeowners avoid foreclosure a failure.

Mr. NEIL BAROFSKY (Special Inspector General, Troubled Asset Relief Program): Hope is slipping away, and Treasury's administration of this program gives little cause for optimism. They continue to refuse to adopt even the most basic metrics and goals and benchmarks to measure success.

CORNISH: Some Democrats asked what more could be done to help the program. But Republicans like Connie Mack of Florida had another idea.

Representative CONNIE MACK (Republican, Florida): What I want to hear is not what's the next regulation, what's the next program, what's the next acronym that we're going to start talking about that is a failure because government can't do it. I want to hear from both of you, if you would, very specifically: What should we repeal?

CORNISH: Neither witness had an answer, although Massad argued that the home loan program was good for the half-a-million people it has helped. In the meantime, Congressman Issa promised that this was just the first of many investigations on the issue.

Audie Cornish, NPR News, the Capitol.

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