By MICHAEL R. CRITTENDEN
January 9, 2009
Wall Street Journal
WASHINGTON -- The U.S. Treasury has failed to reveal its strategy for stabilizing the financial system, not answered questions asked by a government watchdog, and has done nothing to help struggling homeowners, a report being released Friday charges.
In the most scathing criticism yet of Treasury's implementation of the $700 billion financial-rescue package, a draft report being issued by the five-member congressional oversight panel said there appear to be "significant gaps" in Treasury's ability to track hundreds of billions of dollars of taxpayer money.WHAP!
"The panel's initial concerns about the [Troubled Asset Relief Program] have only grown, exacerbated by the shifting explanations of its purposes and the tools used by Treasury," said the draft report, which found that the department has "not yet explained its strategy" for stabilizing the financial markets.KA-POW!
The report faults Treasury on a variety of fronts: having no ability to ensure banks lend the money they have received from the government;
having no standards for measuring the success of the program;
and for ignoring or offering incomplete answers to panel questions.
The bipartisan panel, headed by Harvard Law School professor Elizabeth Warren, reserved its most strident criticism for Treasury's approach to dealing with the foreclosure crisis at the root of the economic turmoil. The draft report noted that Treasury hasn't used any of TARP's $700 billion to help borrowers refinance or deal with mortgages that are worth more than the market value of the homes they are tied to. KA-BOOM!
"Treasury needs to be clear as to what, if anything, it has done, and if it insists on taking credit for private sector efforts, it must explain what 'help' means," the draft report said. KERR-UNCH!
The Treasury Department is responding to political pressure with a plan to better track what banks are doing with the billions of dollars invested by the U.S. government.
A Treasury spokeswoman said there is no time frame for instituting the new measurements and that details of the data to be collected remain uncertain.