“I, Barack Obama, candidate for President of the United States, pledge to the America Public that, if elected President of the United States, my administration will be fully and robustly committed to open, transparent, and accountable government principles.”
“Many of the banks that got federal aid to support increased lending have instead used some of the money to make investments, repay debts or buy other banks, according to a new report from the special inspector general overseeing the government’s financial rescue program… The report by special inspector general Neil Barofsky calls on the Treasury Department to require regular, more detailed information from banks about their use of federal aid provided under the Troubled Asset Relief Program. The Treasury has refused to collect such information.” (emphasis added)
“The special inspector general overseeing the $700 billion financial-sector bailout said the Treasury Department isn’t disclosing enough information about how taxpayer money is being spent. In prepared testimony for a Tuesday hearing of the House Committee on Oversight and Government Reform, Special Inspector General Neil Barofsky said the Treasury has rejected several of his recommendations for more transparency on its part. Mr. Barofsky also said the Treasury has declined to require bailout recipients to explain what they are doing with their government funds.” (emphasis added)
The first quote is the opening statement of the Oath of President Transparency that President Obama signed for Reason nearly two years ago. (See here for a copy of the signed Oath.) The Oath also commits him to “effective management, accountability, transparency, and disclosure of taxpayer expended resources by federal agencies.” The second two quotes point out that, when it comes to TARP, the President is not keeping his word.
Neil Barofsky, the special inspector general for the Troubled Asset Relief Program, testified to Congress yesterday that the federal government’s potential exposure to the various programs and facilities targeted at combating the financial crisis is $23.7 trillion. The total spending to date is just shy of $13 trillion (see Reason’s most recent calculation here). But given the variables in commitments, the number could rise. According to the WSJ:
To get to that [$23.7 trillion] figure, Mr. Barofsky combined direct spending with all the government guarantees and programs and assumes the “gross exposure” the government could face if all the programs were tapped to their fullest potential.
Of course, the Treasury Department is taking issue with Barfosky’s numbers, calling them “inflated.” Again, WSJ reports:
Treasury spokesman Andrew Williams said Mr. Barofsky’s estimate “does not take into account the assets that offset the risk in these programs” and also doesn’t reflect “fees and other charges that compensate the U.S. taxpayer for the risks incurred.”
Barfosky counters this claim by focusing on the Treasury’s reluctance to listen to the inspector general’s recommendations for how to manage the bailout programs and keep track of the spending. Barofsky testified that:
“In rejecting [the inspector general’s] basic transparency recommendations, TARP has become a program in which taxpayers (i) are not being told what most of the TARP recipients are doing with their money, (ii) have still not been told how much their substantial investments are worth, and (iii) will not be told the full details of how their money is being invested. In [the inspector general’s] view, the very credibility of TARP (and thus in large measure its chance of success) depends on whether Treasury will commit, in deed as in word, to operate TARP with the highest degree of transparency possible.”
The point is not whether Barfosky is counting the fees so much as the fact that the administration is not being forth right with where money has gone. The Recovery.gov project is taking forever to get off the ground and is costing millions more than it needs to. While the bailout did start under the Bush administration, the Obama Treasury Department doesn’t seem interested in trying to track all of the dollars. Where is your commitment to the Oath of Transparency, Mr. President?