[Congressional Record Volume 156, Number 160 (Tuesday, December 7, 2010)] [House] [Page H8036] From the Congressional Record Online through the Government Publishing Office [www.gpo.gov] STATE OF THE ECONOMY: TARP LIVES ON AND FED PRINTS MONEY The SPEAKER pro tempore. The Chair recognizes the gentleman from Florida (Mr. Stearns) for 5 minutes. Mr. STEARNS. Mr. Speaker, the Treasury Department announced the end of the TARP on October 3, 2010. Now, it may have marked the end of the Treasury Department's authority to initiate new investments under the Troubled Asset Relief Program, but in reality, TARP is not dead. American taxpayers still face a daunting economic recovery, with the Federal Reserve now downgrading their economic outlook for the United States economy and predicting over 9 percent unemployment through the end of next year as it simultaneously engages in a dangerous quantitative easing plan--a monetary policy used to increase the money supply by simply buying up government securities--that could further damage our financial recovery. Mr. Speaker, let's start with the troubling news about the TARP program. According to Neil Barofsky, the Special Inspector General of the TARP, which is called SIGTARP, the taxpayer-funded bailout program ``remains very much alive.'' In fact, Mr. Barofsky's report states, ``As of October 3, $178.4 billion in TARP funds were still outstanding, and although no new TARP obligations can be made, money already obligated to existing programs may still be expended.'' {time} 1240 Furthermore, $211.3 million in Capital Purchase Program dividends remain outstanding and unpaid. This is money that is owed to the taxpayers. SIGTARP's November report also criticized Treasury's TARP program for failing to save homeowners from foreclosure. Out of the 1.7 million American homes that have been foreclosed on since January 2009, TARP has only supported a little over 200,000 permanent--now that's less than 12 percent--mortgage modifications. Disturbingly, SIGTARP's latest report also indicates that Treasury concealed $40 billion in taxpayer losses on the AIG bailout by changing its valuation methods. Our United States Treasury is now saying taxpayers will only lose $5 billion on AIG, when it previously stated taxpayers would lose $45 billion. Mr. Speaker, the Treasury Department seems inclined to paint an artificial picture of taxpayers' losses and clearly shows the Obama administration isn't being straightforward about the true cost of the taxpayer-funded TARP program. The monetary policies coming out of the Fed are also troublesome. On November 3, the Fed announced that it will purchase $600 billion in government debt (treasuries), over the next 8 months, initiating a second round of quantitative easing. You may recall that in 2008 the Fed engaged in this same kind of quantitative easing, spending around $1.7 trillion to take bonds off the hands of banks. Quantitative easing is a dangerous gamble, and in many ways is akin to the creation of simply another TARP program, but without congressional approval and without transparency for American taxpayers. With this QE2, this second round of quantitative easing, our Nation's central bank will become the largest holder of the national debt in the entire world. The Fed already holds $834 billion of treasuries, and is on pace to have over $1 trillion in treasuries by August 2011. That's more than China, Japan, or any other foreign creditor. The printing of new money as a way to deal with our economic issues is just as worrisome and misguided as the creation of the TARP program. The Fed's QE2 plan could weaken the dollar further and lead to trade disputes with other countries. It could lead bond traders to believe that inflation will run wild. And they could then themselves derail the Fed's efforts by pushing rates even higher. It could also create bubbles as hedge funds and other speculators borrow cheaply and make even bigger bets on stocks and commodities. The true costs of TARP are incalculable, as are the dangerous monetary policies the Fed is pursuing. Even in the improbable event that the TARP program will recover all of its funds, American taxpayers will continue to bear the costs of the Federal Government's demonstration that certain financial institutions are just ``too big to fail''. And likewise, the costs to the economy of the Fed's second round of quantitative easing will be unknown, as the Fed continues to operate behind a veil of secrecy. The American taxpayers are only now just finding out the Fed spent over $3.3 trillion in ``emergency programs'', propping up banks and financial institutions all over the world. Mr. Speaker, the incoming new Republican majority, which the American people resoundingly voted in on November 2, is poised to take control of our disastrous economic situation by dramatically reducing Federal spending and creating jobs through the elimination of this economic uncertainty that exists today and by implementing pro-business policies. We are committed to reducing the costs of government and the proliferation of burdensome regulations, and we will usher in an era of growth that benefits all Americans. ____________________