Snap-O Fact #81

Post date: Jan 25, 2012 8:41:44 PM

Snap-O Fact #81

President Obama Increased the Power and Authority of the TARP Special Inspector General!

The new law made clear the IG has authority over all actions taken under the relief plan; gave the IG the authority to hire auditors quickly by granting him temporary hiring authority; required the Treasury secretary to explain to Congress why any IG recommendations are not implemented; required that the IG issue a public report in September of 2009 to Congress analyzing how the program’s funds have been spent to date; and made funds for the IG immediately available to allow the IG to set up his office. 

There are many myths and misconceptions about TARP that have been repeated until most people believe the direct opposite of the actual facts. One of these myths is that the cost of TARP was $700 billion. The fact is that most of the money has been paid back and the cost to the government for saving the economy was under $100 billion. Although this is still a large amount of money, it was a relatively small price to pay for the result it achieved.

According to The New York Times at the time of the ending of the program, President “Obama will propose tapping cash from the $700 billion Troubled Asset Relief Program to help reduce the 10% unemployment rate.” Today the rate is still high but it has been significantly reduced thanks, in part, to the President's astute actions in turning the TARP program from a losing proposition into a win for America.

Signed into law by President George W. Bush on Oct. 3, 2008, the Troubled Asset Relief Program (TARP) is a program that allows the government to buy assets from financial organizations to strengthen the financial sector. TARP was a Republican brain child that was approved and signed into law under the leadership of George W. Bush. Ironically, rather than taking credit for a program that worked, the Republicans have turned the reality inside out and have led many to believe that TARP is a failed Obama program. The irony doubles when one understands that TARP was effective in saving the U. S. from a disastrous depression yet it has become a dirty word associated with the Obama administration rather than its true initiator. The story takes a triple turn when President Obama correctly defends the program while the creators vilify it and blame it on Obama.

On April 24th 2009, the President signed into law legislation from Senator Grassley and Senator Claire McCaskill to significantly strengthen oversight of TARP by increasing the power and authority of the special inspector general.