Lawmakers Eye TARP Program
MICHELE NORRIS, host:
From NPR News, this is All Things Considered. I'm Michele Norris.
ROBERT SIEGEL, host:
And I'm Robert Siegel. More scorching reviews today for the government's controversial $700 billion financial-rescue program. The congressionally appointed panel overseeing the program issued its first report today. And the report posed 10 questions that the panel will try to answer over the next six months. They include: Is the strategy helping to reduce foreclosures, and is the public receiving a fair deal? During a hearing to accept the report, lawmakers suggested that they were not encouraged by what they'd learned so far. NPR's John Ydstie reports.
JOHN YDSTIE: The congressional oversight panel had its first meeting just two weeks ago. It's headed by Harvard professor Elizabeth Warren. She told lawmakers the questions the panel will try to answer are its best efforts to capture the concerns of real Americans.
Professor ELIZABETH WARREN (Chairwoman, Congressional Oversight Panel): I'll just tell you the highlights. We have 10 questions. What is Treasury's overall strategy? Is the strategy working? How are taxpayer dollars being used?
YDSTIE: Not very well, was the view of lawmakers even before they heard from Professor Warren. She'd been preceded at the witness table by Neel Kashkari, who runs the $700 billion TARP program at the Treasury. And he probably wishes he'd called in sick this morning. It started with a relatively calm admonition from committee Chairman Barney Frank of Massachusetts that the Treasury's failure to use TARP funds to help struggling homeowners might keep Congress from releasing the second half of the $700 billion program.
Lawmakers, including Democrat David Scott of Georgia, repeatedly asked Kashkari whether the Treasury is monitoring the use of the hundreds of billions of dollars in capital the Treasury has injected into banks. The infusion is supposed to induce banks to increase lending and boost the economy. Scott said it's not happening.
Representative DAVID SCOTT (Democrat, Georgia): The banks won't lend it. Here we have sent them $290 billion, but they won't lend it.
YDSTIE: Kashkari responded that it's too early to know if the program is working. He did say Treasury is working with bank regulators to try to determine if lending is increasing. Treasury's rescue of insurance giant AIG also came under fire, specifically for multimillion-dollar bonuses paid to some AIG executives. Here's California Democrat Brad Sherman questioning Kashkari.
Representative BRAD SHERMAN (Democrat, California): Sir, have you met your responsibility to require that appropriate standards of executive compensation be imposed on AIG and the other recipients of TARP funds?
Mr. NEEL KASHKARI (Interim Assistant Secretary of the Treasury for Financial Stability): Congressman, I can't - I don't have the details of what the bonus levels are at AIG.
Representative SHERMAN: Well, you're the one that's supposed to impose appropriate levels of executive compensation.
YDSTIE: Kashkari's failure to give a direct answer brought this response from Illinois Republican Donald Manzullo, whose district has a double-digit unemployment rate.
Representative DONALD MANZULLO (Republican, Illinois): I don't think you understand at all the pain and the hurting that's going on in this country of the people who are on the verge of losing their jobs. And you can sit there and not come to a decision as to whether or not a $3 million bonus is too much? If you even have to ask that question whether it's too much, Mr. Kashkari, you're not the man for the job. I think you should step aside.
YDSTIE: Kashkari didn't respond to that request. In the end, Kashkari defended the Treasury's overall use of the TARP money, saying it was intended to keep the financial system from collapsing, and so far it's worked. John Ydstie, NPR News, Washington.
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