hank paulson, having already pissed through $335 billion in TARP funds while making it up as he goes along, may ask for the 2nd half of the funds.....
Posted by
x (aka dmuck)
Dec 3 '08, 03:42
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"U.S. Treasury Secretary Henry Paulson is debating whether to ask Congress for the second installment of the $700 billion bailout package, concerned about competing demands for the funds and a potentially hostile reaction from lawmakers.
Mr. Paulson's dilemma was thrown into relief Tuesday by a report from the Government Accountability Office, the investigative arm of Congress, which criticized the Treasury Department's handling of the Troubled Asset Relief Program, or TARP.
Besides lawmakers threatening to deny a request for the additional money, Mr. Paulson is also grappling with confusion stemming from the transition to a new administration.
If Mr. Paulson decides to request the next $350 billion, he is expected to do so next week. His hand may ultimately be forced if market conditions continue to deteriorate.
Political and practical concerns also color the debate. While Mr. Paulson wants to steer more funds to financial institutions, Congress has its own ideas, including aid for the auto industry and troubled homeowners -- two ideas Mr. Paulson has resisted.
In its report, the GAO said Treasury hasn't yet developed a way of ensuring that firms receiving federal funds are complying with limits on dividends or executive compensation. Officials also have yet to address such critical issues as how to ensure that the injection of $250 billion into the banking system "is achieving its intended goals."
The report suggested Treasury has little ability to monitor potential conflicts of interest among independent contractors helping implement the program. As a result, there is a "heightened risk that the interests of the government and taxpayers may not be adequately protected and that the program objectives may not be achieved in an efficient and effective manner."
The problems are due in part to the rapid implementation of TARP and a lack of staff for the program. The report said about 48 employees had been assigned to TARP as of Nov. 21, only a quarter of the 200 full-time employees the GAO said may be needed to properly implement rescue efforts."
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