The AP reports that bailout spending is ongoing, despite Treasury Department claims that bailouts are over. (H/T ECM)
Excerpt:
The Treasury Department says its bank bailouts are over, but the spending continues.
In a Sept. 22 speech, Treasury Secretary Timothy Geithner said the bailouts “are completely behind us.”
That’s not quite correct. In the final six months in which it could spend money from the Troubled Asset Relief Program, Treasury set aside $243 million for new contracts for law firms, accountants and money managers to help run what’s left of the bailouts – on top of the $529 million already spent on work by staff, private companies and other agencies. Many of the contracts last until 2019, and there’s nothing to stop the government from hiring even more help if it’s needed to chase down the remaining bailout money.
Treasury’s authority to spend more from the $700 billion fund expired on Oct. 3. The law requires officials to recoup as much as possible of the $185 billion still in the hands of shaky private companies. After all collections are made, the government expects to be out about $51 billion, mostly from housing programs.
Rising voter anger ahead of next week’s elections has made Obama administration officials reluctant to speak candidly about the ongoing cost of managing TARP. Politicians who voted for the TARP law now face tough re-election fights. By downplaying their efforts, officials sidestep criticism of bailouts that helped Wall Street without easing lending or keeping many people in their homes.
A government watchdog said this week that public statements by Treasury officials around the Oct. 3 deadline appeared designed to create a mistaken sense that TARP is over.
“The idea that TARP is dead is just not accurate,” said Neil Barofsky, the special inspector general overseeing the program, in an interview. “People can write its obituary, people can declare that it’s been put out of its misery, but there’s still close to $180 billion of TARP money outstanding, and $82 billion obligated to be spent.”
ECM also sent me this article from the Heritage Foundation which explains how to cut $343 billion from the federal budget without breaking a sweat.
