Panel: TARP's Faults Eroded Government Confidence
STEVE INSKEEP, host:
It was two years ago today that financial markets were in crisis following the collapse of Lehman Brothers. Congress and the Bush administration were scrambling to stabilize the situation, and one of their answers was the $700 billion Troubled Asset Relief Program, or TARP. Today, the TARP's Congressional Oversight Panel issues a report card on the program.
NPR's John Ydstie reports.
JOHN YDSTIE: The $700 billion TARP program was used to rescue banks, auto companies and a major insurance firm. Now with the program's authority set to expire October 3rd, the Oversight Panel is assessing its effectiveness. The panel concludes that while the program did help stabilize financial markets and quell the crisis, it has not achieved other goals specified in its Congressional mandate, like helping struggling homeowners.
Here's the panel's Deputy Chairman Damon Silvers in a conference call with reporters.
Mr. DAMON SILVERS (Deputy Chairman, TARP's Congressional Oversight Panel): Since it was authorized, 7.1 million homeowners have received foreclosure notices.
YDSTIE: Silvers says the TARP has also been ineffective in protecting retirement accounts, home values and promoting jobs and economic growth, which are other goals for the program. The Oversight Panel also found that the Treasury Department's lack of transparency and failure to communicate the TARP's purpose eroded confidence in government action.
Mr. SILVERS: The TARP's unpopularity may have cost the government some of its ability to respond to future financial crisis.
YDSTIE: While the TARP is winding down, some of the programs it spawned will continue. The Oversight Panel shuts down in April.
John Ydstie, NPR News, Washington.
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