A YEAR AFTER THE BAILOUT, LIPINSKI SAYS IT’S TIME TO END TARP
September 25, 2009
With the anniversary of the misguided $700 billion bailout of the financial system coming up next week, Congressman Dan Lipinski (IL-3) today joined 27 members of the House of Representatives in requesting that the Treasury Department allow the Troubled Asset Relief Program to expire in December.
"I voted against the bailout every time it came before me because it contained no real accountability, oversight, or reform, and was ridden with loopholes," Lipinski said. "It was a blank check to those who caused the financial meltdown in the first place, and the passage of time has unfortunately shown that my worst fears about TARP, which I discussed in detail at the time I opposed it, were fully warranted. We still don't know what the banks have done with the billions they were given, executives at firms the taxpayers propped up have taken home huge paychecks, foreign banks wound up receiving taxpayer money, and despite the passage of a year little has been done to fix our broken regulatory system. It's time to shut down this program before any more of our money vanishes into the black hole that is Wall Street's coffers, particularly now that the biggest players have returned to the types of high-risk strategies that caused the crisis. Rather than continuing down the same path, we must pass strong new regulations to prevent the financial sector from once again leading the economy off a cliff."
Problems with TARP were on display Thursday, as TARP Special Inspector General Neil Barofsky testified about the program before the Senate Banking Committee. He reported "it is extremely unlikely that the taxpayer will see a full return on its TARP investment," called the Treasury Department's repeated refusal to disclose more information about how banks are using taxpayer money "a significant frustration," and said TARP "largely remains a program in which taxpayers are not being told what most of the TARP recipients are doing with their money and will not be told the full details of how their money is being invested." Under the legislation that created TARP, the Treasury Department, not Congress, decides whether to extend the program. The lack of checks and balances in the bailout was one of the many reasons Congressman Lipinski opposed it.
Treasury has disbursed or committed to disburse $445 billion under TARP, according to the Special Inspector General, but billions more could still be stopped from being potentially misspent by ending the program.
"We cannot allow the memory of the havoc that unwise and unscrupulous financiers wreaked on the economy last fall to fade," Lipinski said. "I believed then that it was important to stabilize the financial system and prevent a complete collapse. But I also believed, along with many economists, experts, and ordinary people, that the means chosen to achieve that goal were profoundly flawed, and that a better approach was needed. I take no pleasure in having been right."
"Though the worst of the financial crisis may have passed, it is painfully evident that America will still be dealing with the aftershocks for some time to come," Lipinski added. "Unemployment is at a 26-year high. I am focused on supporting efforts to kick-start a genuine recovery, create jobs, enhance America's global competitiveness, and ensure that our economic future is a bright one built on a foundation of real profits instead of creative accounting, financial sleight-of-hand, and mountains of debt."
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