[Congressional Record Volume 155, Number 27 (Tuesday, February 10, 2009)]
[House]
[Pages H1087-H1088]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                      TARP: A TROUBLING INVESTMENT

  The SPEAKER pro tempore. The Chair recognizes the gentleman from 
Florida (Mr. Stearns) for 5 minutes.
  Mr. STEARNS. Madam Speaker, I rise today to address the troubling 
results of a report that was just released last Friday by the 
Congressional Oversight Panel on the Troubled Asset Relief Program, 
TARP.
  In summary, the 50-page report indicates that our United States 
Treasury has overpaid by about $78 billion in order to implement the 
largest private sector bailout in American history. In fact, the study 
directly states that, ``Treasury paid substantially more for the assets 
it purchased than their current market value.'' How much more? Our 
Treasury purchased assets worth about $178 billion for $254 billion. 
That is a direct and unnecessary transfer of our taxpayer dollars to 
private financial institutions that utilize reckless investment 
strategies.
  Thus, the Treasury has essentially shortchanged taxpayers to the tune 
of $78 billion and has not acted as a good steward of our taxpayers' 
funds. To be sure, former Secretary Paulson looked the American people 
in the eye and assured us that the taxpayer investment

[[Page H1088]]

in the TARP program was sound, and we would be given full value in 
return for our investment. In a public statement to the American people 
in October, Paulson said of the TARP program, ``This is an investment, 
not an expenditure, and there is no reason to expect the program will 
cost taxpayers anything.'' Unfortunately, Paulson's statement couldn't 
be further from the truth. The first $350 billion in TARP funds was 
spent in haste, and we have nothing to show for it but waste.
  And the reason for this waste? The use of standardized documents that 
hindered Treasury's ability to address differences in credit quality 
among the capital infusion recipients. Furthermore, our Treasury has 
also failed to explain its reasoning for subsidizing some banks more 
than others, leaving taxpayers and Congress in the dark.
  To add more fuel to the fire, Neil Barofsky, the Special Inspector 
for the TARP program, came out last week and stated: The government 
needs to beef up its oversight and fraud prevention mechanism in regard 
to the TARP program. He stated, ``The Troubled Asset Relief Program 
represents a massive and unprecedented investment of taxpayers' money, 
designed to stabilize the financial industry, but the long-term success 
of this program is not assured.''
  American taxpayers are rightly infuriated. Our Treasury has yet to 
even adopt baseline fraud prevention standards for the TARP program. 
Additionally, there is a noticeable lack of oversight language included 
with the TARP capital infusion contracts. Special Inspector Barofsky 
strongly cautions that oversight language is needed in all TARP 
contracts, particularly with big banks like Citicorp and Bank of 
America, and automobile companies like Chrysler and General Motors. 
Given this troubling investment situation, I am skeptical of how the 
next $350 billion will be spent.
  Looking back to October when former Secretary Paulson came to 
Congress with a 2\1/2\ page double-spaced document ceding himself total 
authority to spend $700 billion in taxpayer dollars, I suppose it is 
not entirely surprising to find out that $78 billion has been wasted. 
The bailout plan was weak from the very beginning. It was Congress that 
had to step in and demand oversight and transparency of Paulson's TARP 
program. And what we ended up getting was a proposal for self-
regulation, with Paulson and former Fed Chairman Ben Bernanke as two of 
only five members of an oversight board charged with monitoring their 
own actions. What we really need is oversight by only those who are 
independent of the administration and that do not have ties to the Wall 
Street banking community.
  So today on the House floor, I echo the sentiments of the 
Congressional Oversight Panel, which stated, ``If TARP is to garner 
credibility and public support, a clear explanation of the economic 
transaction and the reasoning behind any such expenditure of funds must 
be made clear to the public.'' Our Treasury has less than 30 days to 
act together before the next report is released, and hard-working 
taxpayers deserve to hear that their investment has not been made in 
vain.

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