Helping Families Save Their Homes Act Of 2009 - Continued

Floor Speech

BREAK IN TRANSCRIPT

Mr. GRASSLEY. Mr. President, it is no secret that I have worked for decades to bring greater transparency and accountability to all facets of government operations. If there is one thing that I have learned over those years it is that you cannot achieve the goal of greater transparency and accountability without access to information.

During this financial crisis, we hear daily about the need for many more billions in Federal funds to save this bank or that financial firm. In response to the crisis the Treasury Department is buying stakes in banks and other companies. That program is known as the Troubled Asset Relief Program or TARP. It is costing the American taxpayer nearly three quarters of a trillion dollars. Transparency and accountability has never been more important than with a program that big.

In an effort to provide some accountability to the American people for TARP funds, the Government Accountability Office, GAO, the investigative arm of Congress, was required by legislation to conduct oversight of the TARP program.

The GAO's mission is to look at the overall performance of the initiative and its impact on the financial system. The GAO is also required to prepare regular reports for Congress.

However, GAO cannot do its job effectively without access to information about how the funds are used. This should be obvious. Unfortunately, however, the bill that created the TARP and told GAO to oversee it, did not give them the authority to access books and records of the private firms that receive TARP money.

In January, Senator Baucus and I introduced a bill, S. 340, to provide the GAO the ability to access the books and records of firms who received money from the TARP. Senator Snowe is also a cosponsor of the bill, known as the TARP Enhancement Act. Unfortunately, my colleagues on the Banking Committee have not yet taken any action on the bill.

Amendment No. 1020 is simply the text of S. 340. It would ensure that companies that receive assistance from the American taxpayer are required to cooperate with requests for information from the Government Accountability Office about how they used taxpayer money.

The GAO is supposed to be the ``eyes and ears'' of Congress. Well it can't do that job wearing blinders and ear plugs. So I urge my colleagues to support amendment No. 1020, to ensure that GAO has access to TARP recipients' books and records.

Mr. President, in March the Finance Committee held a hearing on the progress and oversight of the Troubled Assets Relief Program, TARP. At that hearing, we heard testimony from acting Comptroller General, the head of the Government Accountability Office, GAO. He testified that in addition to the problem that S. 340 is intended to fix, there is another major gap in GAO's access to information about the TARP. It is not just firms that take taxpayer money who can say ``no'' to GAO's requests for information. The Federal Reserve can too.

The GAO is prohibited by law from auditing the the Federal Reserve. Perhaps that restriction was defensible back when the Federal Reserve focused on monetary policy. However, today it is routinely exercising extraordinary emergency powers to subsidize financial firms far above the levels Congress is willing to authorize through legislation. The Federal Reserve is taking on more and more risk in complicated and unprecedented ways. That risk is ultimately borne by the American taxpayer, but the elected representatives of the taxpayers have not had a say in the Federal Reserve's activities or even a reasonable level of transparency to make sure we understand how much risk taxpayers are on the hook for.

The GAO testified at our hearing that the Federal Reserve is heavily involved in two new TARP programs announced since March of this year. It is also responsible for managing huge portfolios of troubled assets it took on in the bailouts of Bear Stearns and AIG. According to GAO testimony, as of March 27, 2009, Treasury has announced initiatives that are projected to use $590.4 billion of the $700 billion in TARP funds authorized by Congress. However, the projected assistance in these initiatives by the Federal Reserve could be up to $2.9 trillion by GAO estimates. In addition, the Federal Reserve has a variety of other facilities it has established to address the financial crisis adding up to another $1.5 trillion.

Despite these enormous numbers, there is a statutory limitation prohibiting GAO from examining the Federal Reserve. That provision is now in direct conflict with the mission that Congress gave GAO to monitor and report on the TARP.

Amendment No. 1021 would fix this conflict by allowing the GAO to provide Congress a complete and independent view of all the TARP programs, including those with Federal Reserve involvement, such as the Term Asset Loan Facility, TALF, and the Public Private Investment Partnership, PPIP. It would also allow the GAO to examine other extraordinary Federal Reserve actions, such as its acceptance of risky assets from Bear Stearns and AIG.

I urge my colleagues to support amendment No. 1021. Let's not give GAO an important mission to do with a blindfold on. Let's take off the blindfold and let the professionals at GAO take a good hard look on behalf of the American people at what the Federal Reserve is doing.

Source