[Congressional Record Volume 156, Number 160 (Tuesday, December 7, 2010)]
[House]
[Page H8036]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




        STATE OF THE ECONOMY: TARP LIVES ON AND FED PRINTS MONEY

  The SPEAKER pro tempore. The Chair recognizes the gentleman from 
Florida (Mr. Stearns) for 5 minutes.
  Mr. STEARNS. Mr. Speaker, the Treasury Department announced the end 
of the TARP on October 3, 2010. Now, it may have marked the end of the 
Treasury Department's authority to initiate new investments under the 
Troubled Asset Relief Program, but in reality, TARP is not dead. 
American taxpayers still face a daunting economic recovery, with the 
Federal Reserve now downgrading their economic outlook for the United 
States economy and predicting over 9 percent unemployment through the 
end of next year as it simultaneously engages in a dangerous 
quantitative easing plan--a monetary policy used to increase the money 
supply by simply buying up government securities--that could further 
damage our financial recovery.
  Mr. Speaker, let's start with the troubling news about the TARP 
program. According to Neil Barofsky, the Special Inspector General of 
the TARP, which is called SIGTARP, the taxpayer-funded bailout program 
``remains very much alive.'' In fact, Mr. Barofsky's report states, 
``As of October 3, $178.4 billion in TARP funds were still outstanding, 
and although no new TARP obligations can be made, money already 
obligated to existing programs may still be expended.''

                              {time}  1240

  Furthermore, $211.3 million in Capital Purchase Program dividends 
remain outstanding and unpaid. This is money that is owed to the 
taxpayers.
  SIGTARP's November report also criticized Treasury's TARP program for 
failing to save homeowners from foreclosure. Out of the 1.7 million 
American homes that have been foreclosed on since January 2009, TARP 
has only supported a little over 200,000 permanent--now that's less 
than 12 percent--mortgage modifications.
  Disturbingly, SIGTARP's latest report also indicates that Treasury 
concealed $40 billion in taxpayer losses on the AIG bailout by changing 
its valuation methods. Our United States Treasury is now saying 
taxpayers will only lose $5 billion on AIG, when it previously stated 
taxpayers would lose $45 billion.
  Mr. Speaker, the Treasury Department seems inclined to paint an 
artificial picture of taxpayers' losses and clearly shows the Obama 
administration isn't being straightforward about the true cost of the 
taxpayer-funded TARP program.
  The monetary policies coming out of the Fed are also troublesome. On 
November 3, the Fed announced that it will purchase $600 billion in 
government debt (treasuries), over the next 8 months, initiating a 
second round of quantitative easing. You may recall that in 2008 the 
Fed engaged in this same kind of quantitative easing, spending around 
$1.7 trillion to take bonds off the hands of banks.
  Quantitative easing is a dangerous gamble, and in many ways is akin 
to the creation of simply another TARP program, but without 
congressional approval and without transparency for American taxpayers. 
With this QE2, this second round of quantitative easing, our Nation's 
central bank will become the largest holder of the national debt in the 
entire world. The Fed already holds $834 billion of treasuries, and is 
on pace to have over $1 trillion in treasuries by August 2011. That's 
more than China, Japan, or any other foreign creditor.
  The printing of new money as a way to deal with our economic issues 
is just as worrisome and misguided as the creation of the TARP program. 
The Fed's QE2 plan could weaken the dollar further and lead to trade 
disputes with other countries. It could lead bond traders to believe 
that inflation will run wild. And they could then themselves derail the 
Fed's efforts by pushing rates even higher. It could also create 
bubbles as hedge funds and other speculators borrow cheaply and make 
even bigger bets on stocks and commodities.
  The true costs of TARP are incalculable, as are the dangerous 
monetary policies the Fed is pursuing. Even in the improbable event 
that the TARP program will recover all of its funds, American taxpayers 
will continue to bear the costs of the Federal Government's 
demonstration that certain financial institutions are just ``too big to 
fail''. And likewise, the costs to the economy of the Fed's second 
round of quantitative easing will be unknown, as the Fed continues to 
operate behind a veil of secrecy. The American taxpayers are only now 
just finding out the Fed spent over $3.3 trillion in ``emergency 
programs'', propping up banks and financial institutions all over the 
world.
  Mr. Speaker, the incoming new Republican majority, which the American 
people resoundingly voted in on November 2, is poised to take control 
of our disastrous economic situation by dramatically reducing Federal 
spending and creating jobs through the elimination of this economic 
uncertainty that exists today and by implementing pro-business 
policies. We are committed to reducing the costs of government and the 
proliferation of burdensome regulations, and we will usher in an era of 
growth that benefits all Americans.

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