WASHINGTON, December 10 - A panel reviewing the $700-billion bailout for Wall Street today questioned how the Bush administration is spending the funds and challenged the Treasury Department's reluctance to use the money to reduce foreclosures.
The report echoed concerns first voiced by Senator Bernie Sanders (I-Vt.), who has introduced legislation to stop the Treasury Department from tapping a second, $350-billion round from the bailout fund.
"As someone who voted against the Wall Street bailout, I have very serious concerns as to how the Bush Administration has spent the first $350 billion, and I will vigorously oppose giving President Bush the authority to release the remaining $350 billion," Sanders said. "As part of the overall financial bailout, more than $8 trillion dollars of taxpayer money has been placed at risk. This is an unbelievable sum of money and the oversight and transparency for most of these expenditures has been non-existent."
Sanders comment was prompted by the 37-page report by the Congressional Oversight Panel for Economic Stabilization, which laid out the latest critical assessment of Treasury Secretary Henry Paulson's management of the so-called Troubled Asset Relief Program. The report came on the heels of a critical Government Accountability Office audit of the program that was released last week.
The panel's criticism of Paulson focuses on his decision to change the program from its original stated mission to purchase troubled assets from banks and other financial institutions to one that has infused capital into banks by buying stakes in their equity. "What is Treasury's strategy?" the report asks. "Is the strategy working to stabilize the markets?" and "Is the strategy helping to reduce foreclosures?"
Sanders, in addition to freezing the remaining funds, also proposed a bill that would close a tax loophole the Treasury Department opened up as a way to funnel billions of dollars to big banks that swallow up weaker financial institutions.
"I have very serious concerns as to how the Bush administration is spending the first $350 billion they were provided. The second $350 billion tranche must not be spent in the same way," Sanders said. "The administration's plans change on an almost daily basis. They operate in secrecy, and they maneuvered behind the scenes to provide huge tax breaks for the banking industry."
Sanders also objected to any of this bailout money being used for executive bonuses, dividends, mergers or acquisitions. "Instead of continuing to bail out Wall Street, we should focus on economic actions which will directly impact the middle class and working families of this country," he said. "We should use the second $350 billion to create millions of good paying jobs rebuilding our crumbling bridges, roads, culverts, schools and water systems."
To read the first report of the Congressional Oversight Panel for Economic Stabilization, click here.