GAO: Treasury’s Vision for TARP is “Unclear”

Let our journalists help you make sense of the noise: Subscribe to the Mother Jones Daily newsletter and get a recap of news that matters.


The Government Accountability Office has just released its second report [PDF] on the Treasury Department’s Troubled Asset Relief Program, and the troubling key takeaway is this: Treasury’s “strategic vision for TARP remains unclear.” Uh-oh. At present, TARP is the primary mechanism for ensuring the nation’s economy doesn’t entirely collapse. In other words, having more than an ad hoc plan for spending billions of taxpayer money needed to happen, like, yesterday.

With trademark understatedness, the GAO explains the problem:

[E]arly on Treasury outlined a strategy and approach to purchase whole loans and mortgage-backed securities from financial institutions, but changed direction to making capital investments in qualifying financial institutions as the global community opted to move in this direction. Moreover, once Treasury determined that capital infusions were preferable to purchasing whole mortgages and mortgage-backed securities, Treasury did not clearly articulate how the various programs (such CPP, SSFI, and TIP) would work collectively to help stabilize financial markets.

There’s more:

Other actions have raised additional questions about Treasury’s strategy. First, the funding of the first institution to receive funding under TIP [Targeted Investment Program] was announced weeks before the program was established. Similarly, the Asset Guarantee Program was established after Treasury announced that it would guarantee assets under such a program, and many of the details of the program have yet to be worked out. Second, Treasury’s efforts to mitigate residential foreclosures, which have contributed to increased volatility in financial markets, remain in the design phase with no clearly articulated strategy. Finally, while Treasury has continued to publicly report on individual issues, testify, and make speeches about the program, it continues to struggle to convey a clearly articulated and overarching message about its efforts, potentially hampering TARP’s effectiveness and underscoring ongoing questions about its communication strategy. Without a clearly articulated strategic vision, Treasury’s effectiveness in helping to stabilize markets may be hampered.

The GAO notes that Treasury has made some progress on the transparency front since it released its last report in early December, finding that the program was desperately in need of oversight. But the inescapable (and scary) conclusion here is that the agency is still flying by the seat of its pants. It literally can’t explain what its TARP strategy even is, let alone how it’s going to help get us out of this mess.

At least the GAO is looking over Treasury’s shoulder. And its auditors could soon be granted enhanced oversight authority. Earlier this week, Senators Max Baucus and Chuck Grassley, the chairman and ranking member of the Senate Finance Committee, respectively, introduced a bill that would give the GAO access to the records of bailout recipients when it conducts regular reviews of the TARP program.

IT'S NOT THAT WE'RE SCREWED WITHOUT TRUMP:

"It's that we're screwed with or without him if we can't show the public that what we do matters for the long term," writes Mother Jones CEO Monika Bauerlein as she kicks off our drive to raise $350,000 in donations from readers by July 17.

This is a big one for us. It's our first time asking for an outpouring of support since screams of FAKE NEWS and so much of what Trump stood for made everything we do so visceral. Like most newsrooms, we face incredibly hard budget realities, and it's unnerving needing to raise big money when traffic is down.

So, as we ask you to consider supporting our team's journalism, we thought we'd slow down and check in about where Mother Jones is and where we're going after the chaotic last several years. This comparatively slow moment is also an urgent one for Mother Jones: You can read more in "Slow News Is Good News," and if you're able to, please support our team's hard-hitting journalism and help us reach our big $350,000 goal with a donation today.

payment methods

IT'S NOT THAT WE'RE SCREWED WITHOUT TRUMP:

"It's that we're screwed with or without him if we can't show the public that what we do matters for the long term," writes Mother Jones CEO Monika Bauerlein as she kicks off our drive to raise $350,000 in donations from readers by July 17.

This is a big one for us. So, as we ask you to consider supporting our team's journalism, we thought we'd slow down and check in about where Mother Jones is and where we're going after the chaotic last several years. This comparatively slow moment is also an urgent one for Mother Jones: You can read more in "Slow News Is Good News," and if you're able to, please support our team's hard-hitting journalism and help us reach our big $350,000 goal with a donation today.

payment methods

We Recommend

Latest

Sign up for our free newsletter

Subscribe to the Mother Jones Daily to have our top stories delivered directly to your inbox.

Get our award-winning magazine

Save big on a full year of investigations, ideas, and insights.

Subscribe

Support our journalism

Help Mother Jones' reporters dig deep with a tax-deductible donation.

Donate