Chairman Barney Frank issued the following statement regarding the Government Accountability Office (GAO) report on the Treasury Department's implementation of the Troubled Asset Relief Program (TARP):

The American people received two kinds of news about the TARP program – bad and worse news.

The bad news was confirmation by the GAO in its first report about the program that Treasury has no way to measure whether taxpayer funds invested in banks are being used in accordance with the purpose of the law – to increase lending. The much worse news is Treasury’s response that it does not even have the intention of doing so.

GAO recommended that metrics be developed to apply to how individual institutions are using their share of the 250 billion made available to them. Treasury’s extremely disappointing response is to engage in “further discussions on general metrics for evaluating the overall success of the capital purchase program in addressing the purposes of the EESA.

By rejecting the GAO's recommendation that measurement is needed and substituting a vague promise to “evaluate the overall success of the program,” Treasury is coming very close to telling the institutions that they will be free to use the funds as they wish.

Adding this blatant refusal to enforce any lending obligations on individual intuitions the continued policy of ignoring the clear intent of the EESA to aid in the reduction of foreclosures put the Treasury perilously close to a breach faith with those who responded to the Bush Administration’s request to establish the program. A public hearing on the issues raised by the GAO report is now essential.

Read earlier coverage of the GAO report on The Gavel>>

This evening, the United States Capitol Christmas tree was lit. The tree is a 78-foot Subalpine Fir coming from Montana’s Bitterroot National Forest, decorated with 5,000 ornaments crafted by people from across Montana. The tree uses energy efficient LED lights and when the holiday season ends, the tree's mulch will be used on the Capitol grounds.

On Tuesday, December 2, 2008 at 5:00 pm, the United States Capitol Christmas Tree Lighting Ceremony took place on the Capitol West Front. This years tree is a 78-foot Subalpine Fir coming from Montanas Bitterroot National Forest. The Capitol Christmas Tree has been a tradition at the Capitol since 1964. As part of the Capitols continuing commitment to conserve energy, strands of LED lights decorate the tree in addition to 5,000 ornaments crafted by people from across Montana.

Author: NancyPelosi
Keywords: Christmas US Capitol Tree Montana LED lights
Added: December 2, 2008

This afternoon, the Government Accountability Office (GAO) released the first in a series of Congressionally-mandated oversight reports on the Troubled Asset Relief Program (TARP) established in the economic rescue package. GAO found:

Treasury has yet to address a number of critical issues, including determining how it will ensure that CPP is achieving its intended goals and monitoring compliance with limitations on executive compensation and dividend payments. Moreover, further actions are needed to formalize transition planning efforts and establish an effective management structure and an essential system of internal control. To help ensure the program's integrity, accountability, and transparency, GAO recommends that Treasury:

work with the bank regulators to establish a systematic means of determining and reporting in a timely manner whether financial institutions' activities are generally consistent with the purposes of CPP and help ensure an appropriate level of accountability and transparency;

develop a means to ensure that institutions participating in CPP comply with key program requirements (e.g., executive compensation, dividend payments, and the repurchase of stock);

formalize the existing communication strategy to ensure that external stakeholders, including Congress, are informed about the program's current strategy and activities and understand the rationale for changes in this strategy to avoid information gaps and surprises;

facilitate a smooth transition to the new administration by building on and formalizing ongoing activities, including ensuring that key OFS leadership positions are filled during and after the transition;

expedite OFS's hiring efforts to ensure that Treasury has the personnel needed to carry out and oversee TARP;

ensure that sufficient personnel are assigned and properly trained to oversee the performance of all contractors, especially for Contracts priced on a time and materials basis, and move toward fixed-price arrangements whenever possible;

continue to develop a comprehensive system of internal control over TARP, including policies, procedures, and guidance that are robust enough to protect taxpayers interests and ensure that the program objectives are being met;

issue final regulations on conflicts of interest quickly and review and renegotiate mitigation plans to enhance specificity and compliance; and

institute a system to effectively manage and monitor the mitigation of conflicts of interest.

Read the summary>>

Read the full report>>

Speaker Pelosi on the GAO report:

The GAO's discouraging report makes clear that the Treasury Department's implementation of the TARP is insufficiently transparent and is not accountable to American taxpayers. As part of its flagship program to invest directly in financial institutions, the Treasury Department failed to impose conditions on the use of government funds, which were intended to help ease the credit crunch, undermining the intent of the Emergency Economic Stabilization Act and public confidence.

Congress has repeatedly expressed concerns to the Treasury Department about the need to improve the TARP's accountability and transparency. The GAO report reaffirms Congress' view and calls on Treasury to take several critical steps to accomplish this goal, specifically by improving its communication with Congress and the general public.

The lack of any requirement by the Administration on how financial institutions use these capital infusions is in clear contrast to Congress requiring detailed plans for long-term viability from the domestic auto companies. It is difficult to comprehend why the Bush Administration refuses to provide short term emergency auto industry loans through the TARP—when we know bankruptcy is not an option for the automakers or our economy.

We welcome the GAO's continued monitoring of the Treasury Department's actions and look forward to the Congressional Oversight Board's report on TARP implementation on December 10.

Congress also remains concerned that the Administration has failed to implement a foreclosure mitigation plan to help millions of families stay in their homes as required under the financial rescue legislation. Preventing foreclosures will slow the nationwide drop in home values, protect neighborhoods, and is essential to address the root cause of our economic crisis.

This year marks 20 years since the first World AIDS Day was commemorated to raise awareness and move the nations of the world to act.

Although it took far too long, the world is finally rising to the challenge. Since 2002, international HIV/AIDS assistance has increased nearly five-fold. As a result, the number of people in developing countries receiving antiretroviral medications has increased ten times to more than 3 million. Increased access to treatment is already saving lives, with the number of AIDS deaths beginning to decline in 2005 after decades of increases.

Despite this progress, the scope of the challenges ahead is enormous. More than 33 million people are still living with HIV and AIDS, and more than 7,000 new infections occur every day. Among African American women, the disease has become so rampant that it is this group’s leading cause of death between the ages of 25 and 34.

This year's theme for World AIDS Day, "Lead – Empower – Deliver,' emphasizes the need for global leadership to address these challenges. During the 110th Congress, we have successfully increased funding for global AIDS initiatives by $1.8 billion, bringing total funding to $5 billion, with an additional $500 million increase pending for fiscal year 2009.

This year, Congress reauthorized the President's Emergency Program for AIDS Relief (PEPFAR), moving relief from the emergency phase to the sustainability phase in fighting AIDS, Tuberculosis, and Malaria by significantly increasing resources for treatment, prevention, and stronger health care delivery systems. This groundbreaking legislation also eliminated the requirement that one-third of the funding be used for abstinence programs, eliminated the travel ban for visitors who are HIV positive, and improved services for women and girls.

We need to match this unprecedented global commitment with a stronger commitment here at home to reducing new HIV infections and increasing access to treatment. Although the 110th Congress enacted large increases for Ryan White care programs in fiscal years 2007 and 2008, with another $100 million increase still pending for fiscal year 2009, funding for the domestic epidemic overall has been woefully inadequate since 2001. More than 1.1 million people are currently living with HIV/AIDS in the United States, with only 55 percent of those in need of antiretroviral treatments receiving these lifesaving medications.

As President-Elect Obama called for during his campaign, a new National AIDS Strategy is needed to use resources more effectively, and to track and improve outcomes focused on fewer new infections, increased access to care, and reduced racial and ethnic disparities. Funding is pending in the fiscal year 2009 Appropriations bill to initiate this effort. Developing this strategy and implementing its vision must be a major priority over the next few years.

As we begin a new era of leadership in the United States, we renew our commitment to working together with all nations to answer today's call for renewed leadership in the effort to combat, and eventually end, HIV/AIDS.

Speaker Pelosi and Leader Harry Reid today sent the following letter to the Big Three U.S. auto executives, calling on them to “submit a credible restructuring plan that results in a viable industry, with quality jobs, and economic opportunity for the 21st century while protecting taxpayer investments” by December 2nd:

November 21, 2008

Dear Messrs Wagoner, Mulally, and Nardelli:

We recognize the importance of the domestic automobile industry and are committed to working with you to ensure its viability in the years to come. One in 10 American jobs is related to auto manufacturing; our national security depends on the industry's technologies and manufacturing capacity; and our competitiveness in a global economy depends on its pursuit of excellence.

As you know, Congress has provided President Bush, the Chairman of the Federal Reserve, and the Treasury Department the authority they need under the Emergency Economic Stabilization Act (EESA) as well as other authorities to provide short-term financial assistance to the auto companies.

Unfortunately, the Bush Administration and the Federal Reserve have thus far declined to use their powers to improve our nation's financial stability by assisting the auto industry. Notwithstanding existing authorities, this Congress is prepared to consider additional legislation that would give the assistance you seek, provided that you submit a credible restructuring plan that results in a viable industry, with quality jobs, and economic opportunity for the 21st century while protecting taxpayer investments.

In order for Congress to act in a timely manner, this plan must be presented to Congress by December 2nd, specifically to Senate Banking Committee Chairman Christopher Dodd and Financial Services Committee Chairman Barney Frank.

It is critical that you meet this deadline since we have announced we are prepared to come back into session the week of December 8 to consider legislation to assist your industry. We intend to give pertinent agencies within the executive branch, the Government Accountability Office, the Board of Governors of the Federal Reserve, as well as outside experts, the opportunity to comment on your work.

The plan must:

Provide a forthright, documented assessment of the auto companies' current operating cash position, short-term liquidity needs to continue operations as a going-concern, and how they will meet the financing needs associated with the plan to ensure the companies' long-term viability as they retool for the future;

Provide varying estimates of the terms of the loan requested with varying assumptions including that of automobile sales at current rates, at slightly improved rates, and at worse rates;

Provide for specific measures designed to ensure transparency and accountability, including regular reporting to, and information-sharing with, any federal government oversight mechanisms established to safeguard taxpayer investments;

Protect taxpayers by granting the most senior status for any government loans provided, ensuring that taxpayers get paid back first;

Assure that taxpayers benefit as corporate conditions improve and shareholder value increases through the provision of warrants or other mechanisms;

Bar the payment of dividends and excessive executive compensation, including bonuses and golden parachutes by companies receiving taxpayer assistance;

Include proposals to address the payment of health care and pension obligations;

Demonstrate the auto companies' ability to achieve the fuel efficiency requirements set forth in the Energy Independence and Security Act of 2007, and become a long-term global leader in the production of energy-efficient advanced technology vehicles; and

Require that government loans be immediately callable if long-term plan benchmarks are not met.

The auto companies' shareholders, business partners, and prospective benefactors—the American people—deserve to see a plan that is accountable to taxpayers and that is viable for the long-term. In return for their additional burden, taxpayers also deserve to see top automobile executives making significant sacrifices and major changes to their way of doing business.

We look forward to working with you to ensure a viable American automobile manufacturing sector for decades to come. If we are successful, we can ensure a brighter future for the automobile industry, our nation, and our planet.

Thank you for your prompt attention to this matter.

Sincerely,

Nancy Pelosi
Speaker of the House

Harry Reid
Senate Majority Leader