[Congressional Record Volume 154, Number 183 (Monday, December 8, 2008)]
[Senate]
[Pages S10791-S10792]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                                  TARP

  Mr. BOND. Before closing, I offer a few comments on the TARP program. 
Since enactment of the Emergency Economic Stabilization Act in early 
October, the Treasury Department has spent almost all of its initial 
$350 billion under TARP to recapitalize several banks and financial 
institutions. It has been reported that the Treasury Secretary may 
request the remaining $350 billion as early as this week. Under the 
law, the President must submit a written request that details the 
Treasury Secretary's plan to use the additional funds, and Congress has 
15 days to enact a disapproval resolution. However, given the track 
record of the Treasury's use of the initial $350 billion of TARP funds, 
it is difficult for many of us to feel confident that the Department 
will spend additional funds in an effective and efficient manner. The 
administration is going to have to demonstrate that it has addressed a 
number of very serious implementation issues. As a Senator from the 
Show Me State, I expect to see them.
  Some of these issues are related to the management and oversight of 
the funds as reported last week by the U.S. Government Accountability 
Office, the GAO. In its report, the GAO uncovered a number of 
management and oversight deficiencies that raise serious questions 
about the program's integrity, accountability, transparency, and 
effectiveness. Frankly, the GAO's findings were very troubling. The GAO 
pointed to the Treasury Department's inadequate staffing, failure to 
establish a mechanism to track billions in taxpayer funds provided to 
the banks, and failure to establish a system on how it would monitor 
compliance with executive compensation limitations required by the 
legislation. In other words, it appears the Treasury is unable to tell 
taxpayers how their funds are being spent and whether the money is 
being spent in a reasonable and effective manner. I don't think that is 
acceptable.
  The GAO also uncovered other troubling findings, such as Treasury's 
lack of action to address the foreclosure crisis. As we all know, the 
housing foreclosure crisis is at the center of the financial credit 
crisis. In recognition of this, the EESA included specific language for 
the Secretary to address the housing crisis. Unfortunately, Treasury 
has not taken sufficient action as communities and families across the 
country continue to be devastated by foreclosures. Loan modification 
efforts are failing, as evidenced by the Treasury Office of 
Comptroller--the OCC--data released this morning. According to the OCC, 
about 36 percent of borrowers were more than 30 days past due on loan 
payments 3 months after their loan was modified and nearly 53 percent 
were more than 30 days late after 6 months. What is going on here?
  These findings raise significant questions, if not doubts, about both 
private and Government loan modification efforts, including those 
through the Department's so-called HOPE NOW Program. As I previously 
warned, the administration's and Congress's push to use the Federal 
Housing Administration to prevent foreclosures by refinancing subprime 
and troubled loans may end up costing taxpayers a lot of money in the 
near future. Rescuing the FHA through taxpayer funds is not surprising 
to those who have watched the FHA closely and know they have 
longstanding management and oversight

[[Page S10792]]

problems and lack of resources. Clearly, a more aggressive, 
comprehensive, and smarter approach to the foreclosure crisis must be 
taken if we are to recover from the recession.

  The housing crisis has now spread from subprime mortgages to prime 
mortgages as economic factors impact borrowers' ability to pay their 
mortgages. Due to expansion of the mortgage crisis, it is critical that 
we find measures to protect and create jobs. The importance of jobs and 
its impact on the housing crisis further raises the importance of 
devising a responsible rescue package for the auto industry since 
millions of jobs are at risk--over 3 million jobs in the Nation, 
220,000 jobs in Missouri.
  TARP has also disappointed me by the ad hoc implementation of the 
program. Prior to the creation of TARP, the Department seemed to be 
improvising on a daily basis its intervention with financial markets. 
One of our intents in creating TARP was to provide a structure and 
coherency to the Government's approach to the financial crisis. That we 
have not seen. Before this and the next administration submit a request 
for the remaining TARP funds, we expect to have answers to the 
questions and issues raised by the GAO and others. The Government needs 
to provide more certainty on how it will address the financial and 
economic crisis and provide answers to taxpayers on how it has spent 
taxpayers funds already provided.
  These are very serious times. I want to see action by this Congress. 
I want to see us move quickly. But I also want to see action by the 
auto industry to advise the czar or the Secretary of Commerce, and I 
want to see action by the Treasury to give us a better idea of how TARP 
funds are being used, how they will be accounted for, how they are 
going to be implemented, and how they are going to be used. If they 
don't have an approach, I will come forward with a suggestion on how we 
restructure those home loans that are in crisis.
  I ask unanimous consent that Senator Brownback be added as a 
cosponsor to S. 3715, the Auto Industry Emergency Bridge Loan Act.
  The ACTING PRESIDENT pro tempore. Without objection, it is so 
ordered.
  Mr. BOND. I yield the floor and suggest the absence of a quorum.
  The ACTING PRESIDENT pro tempore. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. SPECTER. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The ACTING PRESIDENT pro tempore. Without objection, it is so 
ordered.
  Mr. SPECTER. Mr. President, I arrived at the same time as the 
distinguished Senator from North Dakota, and I ask unanimous consent 
that he be recognized following my brief presentation.
  The ACTING PRESIDENT pro tempore. Without objection, it is so 
ordered.

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