The "TARP" Salesmen Get Grilled on the Hill
Tuesday, November 18, 2008PAUL KANGAS: Also on Capitol Hill, Treasury Secretary Henry Paulson faced tough questions about how he doled out the first half of the $700 billion financial rescue plan. He scrapped his original plan to buy troubled assets in favor of direct capital injections, with no help for home owners. As Stephanie Dhue reports, Paulson did not find a welcome mat rolled out for him.
STEPHANIE DHUE, NIGHTLY BUSINESS REPORT CORRESPONDENT: Law makers blasted Treasury Secretary Henry Paulson for pulling what they called a bait and switch with the troubled asset repurchase plan or TARP. California's Maxine Waters, who lobbied for the original bailout bill, gave Paulson a piece of her mind.
REP. MAXINE WATERS, (D) CALIFORNIA: I was asked over and over again, will the home owners be helped? What are we going to do about Main Street, not just Wall Street? And we spent and I spent, considerable time selling this program to those who were suspicious and did not want to do it.
HENRY PAULSON, TREASURY SECRETARY: Let me just say specifically to you, Congresswoman, that I have not said no to doing something here in the TARP aimed at foreclosure mitigation.
DHUE: So far Treasury has said no to an FDIC plan to spend $24 billion on a streamlined loan modification program. Committee Chairman Barney Frank says Congress intended the TARP to help home owners.
REP. BARNEY FRANK, CHAIRMAN, HOUSE FINANCIAL SERVICES COMMITTEE: $40 billion for AIG and then we can't find $24 billion on the mortgage foreclosure, is part of the reason we have the real problem with the country.
DHUE: Paulson says industry efforts to streamline loan workouts are already under way and he says the TARP is working.
PAULSON: I think we've turned the corner in terms of stabilizing the system, preventing a collapse. I think there's a lot of work that still needs to be done in terms of recovering the financial system.
DHUE: Many law makers also want to extend a helping hand to the auto industry through the TARP, but Paulson says that's not what it's for.
PAULSON: The purpose is stabilizing and strengthening our financial system. And I've said to you very clearly that I believe that the auto companies fall outside of that purpose.
DHUE: The Obama administration will soon put its stamp on the TARP, likely determining how to allocate the next $350 billion. Stephanie Dhue, NIGHTLY BUSINESS REPORT, Washington.
