Lewis Announces a Hearing on the Troubled Asset Relief Program: Oversight of Federal Borrowing and the Use of Federal Monies

In view of the limited time available to hear witnesses, oral testimony at this hearing will be from invited witnesses only.  The Special Inspector General for TARP, the Honorable Neil Barofsky, and the Acting Comptroller General of the United States, Mr. Gene Dodaro, have been invited to testify.  Any individual or organization not scheduled for an oral appearance may submit a written statement for consideration by the Subcommittee and for inclusion in the printed record of the hearing. 

BACKGROUND:

Public Law 110-343, the “Emergency Economic Stabilization Act of 2008” (the Act), was enacted to provide authorities and facilities that the Secretary of Treasury (Secretary) can use to restore liquidity and stability to the financial system of the United States.  The Act authorizes the Secretary to establish TARP to purchase, and to make and fund commitments to purchase, troubled assets from any financial institution.  The Act provides that the Secretary shall establish a program to guarantee certain troubled assets.  The Act authorizes the Secretary to purchase and hold up to $700 billion in troubled assets at a time.  Further, the Act increased the statutory limit on the public debt to $11.3 trillion (which is now $12.1 trillion).

The Act included numerous provisions with respect to TARP oversight.  The Act established the Office of the Special Inspector General for the TARP (SIGTARP) to conduct, supervise, and coordinate audits and investigations of the purchase, management, and sale of assets under the program.  The Act created the Congressional Oversight Panel.  The Act mandated that the Comptroller General of the United States conduct ongoing oversight of the activities and performance of TARP.  Further, the Secretary is required under the Act to provide reports to the appropriate committees of the Congress, including the Committee on Ways and Means, detailing monthly activities and each $50 billion in commitments to purchase troubled assets. 

The first oversight reports to the Congress by SIGTARP and the Comptroller General both noted that Treasury has utilized TARP funds differently than had been envisioned at inception of the Act.  TARP’s primary focus was expected to be the purchase of troubled assets, such as mortgages and mortgage-backed securities.  However, within two weeks of enactment, then-Secretary Henry M. Paulson changed the strategy and decided to make capital investments of approximately $290 billion directly in financial institutions and other eligible recipients.  This changed strategy resulted in an extraordinary use of public monies.

In announcing the hearing, Chairman Lewis said, “In the face of this economic crisis, we must restore public confidence in the use of Federal funds.  As a starting point, taxpayers need to be certain that TARP funds are being spent for their intended purposes.  The questions are simple.  How much has been spent, and what have the recipients done with the money?  We need answers.”

FOCUS OF THE HEARING:

The focus of the hearing is to review TARP, its operations, and oversight.  Specifically, the Subcommittee will focus on the role of Federal borrowing, the impact on the national debt, and the protection of public monies.  The Subcommittee also will consider the role of Federal tax compliance under this program.

DETAILS FOR SUBMISSION OF WRITTEN COMMENTS:

Please Note:  Any person(s) and/or organization(s) wishing to submit for the hearing record must follow the appropriate link on the hearing page of the Committee website and complete the informational forms.  From the Committee homepage, http://waysandmeans.house.gov, select “Committee Hearings”. Select the hearing for which you would like to submit, and click on the link entitled, “Click here to provide a submission for the record.”  Once you have followed the online instructions, complete all informational forms and click “submit” on the final page. ATTACH your submission as a Word or WordPerfect document, in compliance with the formatting requirements listed below, by close of business Thursday, April 2, 2009.  Finally, please note that due to the change in House mail policy, the U.S. Capitol Police will refuse sealed-package deliveries to all House Office Buildings.  For questions, or if you encounter technical problems, please call (202) 225-1721.

FORMATTING REQUIREMENTS:

The Committee relies on electronic submissions for printing the official hearing record. As always, submissions will be included in the record according to the discretion of the Committee. The Committee will not alter the content of your submission, but we reserve the right to format it according to our guidelines. Any submission provided to the Committee by a witness, any supplementary materials submitted for the printed record, and any written comments in response to a request for written comments must conform to the guidelines listed below. Any submission or supplementary item not in compliance with these guidelines will not be printed, but will be maintained in the Committee files for review and use by the Committee.

            1.   All submissions and supplementary materials must be provided in Word or WordPerfect format and MUST NOT exceed a total of 10 pages, including attachments.  Witnesses and submitters are advised that the Committee relies on electronic submissions for printing the official hearing record.

            2.  Copies of whole documents submitted as exhibit material will not be accepted for printing.  Instead, exhibit material should be referenced and quoted or paraphrased.  All exhibit material not meeting these specifications will be maintained in the Committee files for review and use by the Committee.

            3.  All submissions must include a list of all clients, persons, and/or organizations on whose behalf the witness appears.  A supplemental sheet must accompany each submission listing the name, company, address, telephone, and fax numbers of each witness.

Note:  All Committee advisories and news releases are available on the World Wide Web at http://waysandmeans.house.gov.

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CONTACT:  (202) 225-5522