Bailout tab: $3 trillion so far
Almost all of the TARP cash is spoken for, and some Senators and oversight officials complained of being left in the dark about its use at a hearing on Tuesday.
By Peter Grier | Staff writer/ March 31, 2009 edition
Reporter Peter Grier discusses bank officials' testimony Tuesday before a Senate banking committee meeting on TARP funds.
Reporter Peter Grier
Pablo Martinez Monsivais/AP/File
Senate Finance Committee Chairman Sen. Max Baucus (D) of Mont., top, listens to then-Treasury Secretary-designate Timothy Geithner, speak on Capitol Hill in January.
Washington
Cash commitments made by the US government to its main bailout efforts – the Treasury’s Troubled Asset Relief Program (TARP), various Federal Reserve Board programs, and some others – have now reached at least $2.98 trillion, Neil Barofsky, Special Inspector General for TARP, told the Senate Finance Committee at a hearing Tuesday.
That estimate does not include the cost of any further aid for GM and Chrysler or the warranty support program announced Monday by President Obama. It does not account for the $750 billion cushion against possible future bailouts that Mr. Obama included in his fiscal year 2010 budget request.
Even so, that astounding total is about as big as the entire federal budget was before the current financial storm began.
“It’s like having a second US budget dedicated solely to saving the US financial system, and that truly is surreal,” said Finance Committee chairman Sen. Max Baucus (D) of Montana.
The $2.98 trillion figure represents tax dollars that are committed to bailout operations, not money that has been appropriated and spent.
The TARP – the original financial rescue fund, passed last year after great effort by the Bush administration – is almost out of money. The Treasury has announced plans for about $667 billion of its $750 billion in TARP funds. About $300 billion of the $667 billion has already been sent to participating banks.
The Obama administration has been careful to depict the TARP as broad-based, helping banks in cities and towns all across the nation. That is true, in the sense that 364 institutions throughout the US have received TARP money, said Mr. Barofsky. But, “the majority of the funding went to a small number of recipients, with 26 firms receiving approximately 93 percent” of TARP cash, he said.
Tracking what banks do with TARP money once they get it remains a big issue in Congress. Rather than wait for the Treasury to produce data on the issue, Barofsky said he went ahead and asked all 364 recipients of TARP cash to report on how they’d used it.
They all responded. Some provided more detail than others, but overall “one thing is clear: Complaints that it is impractical, impolitic, or a waste of time to get banks to detail their use of TARP funds are unfounded,” said Barofsky.
Still, both Senators and oversight officials at Tuesday’s hearing complained of being left in the dark by the Treasury. The Treasury official in charge of TARP, Neel Kashkari, declined to appear and answer questions at the session.
“There is no transparency. It means Congress and the American people have been cut out of this equation,” said Elizabeth Warren, chair of the Congressional Oversight Panel for TARP.
Comments
2. DaveK | 03.31.09
“…and some Senators and oversight officials complained of being left in the dark about its use…”
I wonder if they can imagine then how we, the American public, must feel.
3. Michael DeBurgh | 03.31.09
Congress feels left out of it? They aren’t being told how TARP funds are being spent? Oh my heavens! How can that be? Could it be that they didn’t write reporting requirements into law? If it isn’t the letter of the law, it doesn’t have to be done; the spirit of the law, the intent of congress is not law.
4. nic | 04.01.09
It’s a shame nobody reconizes the situation for what it is: the failure of the “casino capitalism” and its saving by state. Nobody in eastern Europe is fooled by what is happening in America.We were told for years that american capitalism is a self regulating mechanism, but what we see is a desperate effort to save it with socialist means. At the begining of 1990’s the advice which came from Anerica was: “privatize”. Now it’s “nationalize”. Well done!
5. Jim Mooney | 04.01.09
Good old Geithner - the poster boy for Wall St. Greed. Fatten the corrupt bankers and to **** with the rest of us. So much for Mr. Change, Obama. How much change is throwing more money at the incompetent crooks who destroyed the system? They’ll do that until it fails, Then try the thing that most economists recommend, and that worked in Sweden - temporary nationalization of bankrupt banks. And hopefully, getting rid of their rotten leaders, who stand to profit personally, to the tune of millions per crook, on the back of the taxpayer, yet again. I’m sure Geithner will get a fat job at Goldman-Sachs, as “thanks” for his help, when he’s out of office. The banks will own
Everything, by now, including us. They already own the government.
I’m sorry I voted Democratic. This is the same failing thing the last Administration did.
6. Peter | 04.01.09
The money need to be given to hire all who are layoff so the people have income to put back into the economy for it to rotate again. It is very foolish to give money to bail out the companies that poorly manage or perhaps committed fraud in their dealings. Those CEOs need to be responsible for their dealings and accountable for their actions. When something collapse, it takes years of neglect and abuse for it to fall. These CEOs make their money and now hand over a sinking ship for the taxpayer to keep it afloat? It is very stupid for us to hand out money like that, any idiot can spend money, it takes a wise & courageous person to see the true and solve it according to the law and principle.
7. Judith Campbell | 04.01.09
Isnt there a way for the American people to get Obama out of office and stop all this socialism?
8. Imminent Lee Profitized | 04.02.09
Now now people !! Think about it … If YOU had a chance to play with a blank check, would you think twice about the amount you wrote ?? 750 million, no wait, 750 billion, no wait, I got it, One Trillion … yeah, now THAT has a nice ring to it but is that enough ??
It is SO obvious what is going on and the players involved … The REAL question is who can do anything about it ??? What will THAT cost ???
So in the mean time, we pay higher taxes, hold on to the “promises” and “visions” of the Obama campaign, cut back on all non profit related events and have one beer …
I hear there are openings at AIG !!! LOL !!!
One final blurb, the “oversight” committee takes the definition to the tee: Unintentional failure to notice or consider; lack of proper attention” ..
BTW: TARP is just that, a means to cover what is really happening !!!
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1. Barbara | 03.31.09
I find the whole bailout issue to be murky and terrifying at the same time. I’m convinced that part of what scares the average citizen, myself included, is the massive amount of money committed to largely unknown entities, and for reasons that are unclear. It’s like throwing money down a well. Whatever happened to sink or swim? If a business doesn’t manage itself properly - an auto manufacturer, for example - it should be allowed to either correct it’s problems or fail. Wouldn’t the remaining ones take up the slack or create new business opportunities? Isn’t evolutionary economy part of captalism? Isn’t that how we learn?