Oversight of Troubled Asset Relief Program Loans: Tim Geithner vs. Elizabeth Warren (2009)

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• published: 29 Jul 2013
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The Emergency Economic Stabilization Act created the Troubled Asset Relief Program to administer up to $700 billion. Several oversight mechanisms are established by the bill, including the Congressional Oversight Panel, the Special Inspector General for TARP (SIGTARP), the Financial Stability Oversight Board, and additional requirements for the Government Accountability Office (GAO) and the Congressional Budget Office (CBO). The "Congressional Oversight Panel" was mandated by Title 1, Section 125 of the TARP legislation [6] as an "establishment in the legislative branch." The Congressional Oversight Panel is charged with the job of reviewing the state of the markets, current regulatory system, and the Treasury Department's management of the Troubled Asset Relief Program. The panel is required to report their findings to Congress every 30 days, counting from the first asset purchase made under the program. The panel must also submit a special report to Congress about regulatory reform on or before January 20, 2009.[7] The Congressional Oversight Panel will cease to exist on December 31, 2009 unless renewed.[8] The panel consists of five outside experts appointed as follows: One member chosen by the Speaker of the House (Nancy Pelosi selected Richard H. Neiman on November 14[9]) [10] One member chosen by the minority leader of the House (John Boehner appointed Jeb Hensarling on November 19) [11] One member chosen by the majority leader of the Senate (Harry Reid appointed Elizabeth Warren on November 14) One member chosen by the minority leader of the Senate (Mitch McConnell appointed John E. Sununu on December 17 after his original choice Judd Gregg had "stepped aside" December 1 [12]). One member chosen by the Speaker of the House and the majority leader of the Senate, following consultation with the minority leaders of Congress (Damon Silvers [13] was appointed on November 14) The first meeting of this board was held Wednesday, November 25, 2009, and elected Elizabeth Warren as the chairperson and Damon Silvers as deputy chairperson. As no assets have yet been purchased, (OFS instead chose to provide $250 billion to banks through the Capital Purchase Program) it is not clear whether the requirement to report after 30 days from "first asset purchase" has been violated. On December 8, 2009, the government's financial bailout program concluded in a year-end review that, despite flaws and lingering problems, the program "can be credited with stopping an economic panic."[14] Also on this date, Rep. Jeb Hensarling stepped down from the panel, submitting his letter of resignation. Hensarling was replaced by Mark McWatters, a Dallas lawyer and certified public accountant who has served as an advisor to Hensarling.[15] On October 1, 2010, Senator Ted Kaufman of Delaware was appointed by Majority Leader Reid to replace Warren on the panel, as Warren resigned to focus on her duties at the Consumer Financial Protection Bureau.[16] Three days later, Kaufman was unanimously elected as the panel's second chairperson.[17] Kaufman was succeeded in Congress by Senator Chris Coons on November 15, 2010, but he remains chairperson of the Congressional Oversight Panel as of late December 2010.[18] The Comptroller General (director of the Government Accountability Office) is required to monitor the performance of the program, and report findings to Congress every 60 days. The Comptroller General is also required to audit the program annually. The bill grants the Comptroller General access to all information, records, reports, data, etc. belonging to or in use by the program.[19][20] On December 2, 2008, GAO released their first report on the bailout.[21][22] Neel Kashkari, the OFS chairman, said in a letter to GAO [23] that the department agrees with the report's findings and most of its recommendations but questioned GAO's suggestion to require more reporting from banks, saying gathering specifics from individual banks might not be the best way to evaluate the program. House Speaker Nancy Pelosi called the report's findings "discouraging" and that the report shows the program "is not accountable to American taxpayers." http://en.wikipedia.org/wiki/Oversight_of_the_Troubled_Asset_Relief_Program