Geithner Testimony On TARP Funds (LIVE VIDEO)

Only $109.6 billion in resources remain in the government's $700 billion financial rescue fund.

But Treasury Department officials said Tuesday they expect the fund will be boosted over the next year by about $25 billion as some institutions pay back money they have received. That would boost the total to $134.6 billion.

Watch live video of the hearing:

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The accounting details were made by Treasury Secretary Timothy Geithner in a letter to Elizabeth Warren, the head of the Congressional Oversight Panel.

In the letter, Geithner said the Bush administration had committed $355.4 billion in resources before it left office. That total included $117 billion committed to insurance giant American International Group Inc., banking giants Citigroup Inc. and Bank of America Corp., and auto companies General Motors Corp. and Chrysler LLC.

Since the Obama administration has taken office, an additional $30 billion has been committed to AIG and $5 billion to auto suppliers, bringing the total for what the administration termed "exceptional assistance" to $152.4 billion.

Another $218 billion has been committed to banks to bolster their capital reserves. So far, that program has disbursed nearly $200 billion to more than 500 banks nationwide with more applications pending. Former Treasury Secretary Henry Paulson had once set a goal of having $250 billion disbursed to banks.

By Treasury's accounting, another $20 billion has been committed to the initial joint effort with the Federal Reserve to boost lending to consumers and businesses under a Fed program known as the Term Asset-Backed Securities Loan Facility.

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Congress authorized the bailout fund on Oct. 3 after the Bush administration said a sizable response was needed to deal with the worst financial crisis to hit the country in seven decades.

The Obama administration sent Congress a budget request earlier this year that included a "placeholder" to more than double the fund to $750 billion. However, lawmakers have told the administration there is no chance they will approve any proposal to boost the fund.

There has been a sizable political uproar over reports of millions of dollars in bonuses paid to executives at financial institutions getting bailout funds. There also is unhappiness that all the money has failed so far in its primary objective of getting banks to resume more normal lending to consumers and businesses.

Geithner's letter said the projection that the fund now has $109.6 billion in uncommitted resources was conservative because it assumed full participation in several new programs. If participation falls below expectations, more resources will remain.

The $109.6 billion is how much the administration has available to provide additional resources to the auto companies and deal with any of the nation's largest banks found to need more aid after "stress tests" are completed at the end of this month.

To make the rescue funds go farther, administration officials said Monday they were considering converting some of the loans provided banks under the $218 billion capital purchase program into purchases of common shares, which investors view as a stronger type of capital.

Comments

[toypiano]

This is just so effing insulting. Again.

Throwing free taxpayer money at the rich men who ruined the world's economy, while bankrupting ordinary Americans, is unacceptable. Stop coddling the effing banksters, Geithner, at OUR expense. We're all really impressed at how you're making your wealthy pals on Wall Street even wealthier, but WHERE ARE OUR JOBS? Our healthcare? OUR wealth?

Geithner is an insult to the intelligence of the average American and goes about his merry way repeating the same lies over and over. His agenda is transparent. He takes care of his pals on Wall Street because he IS one.

ECONOMIC JUSTICE: Fire Geithner.

[beaupritchard]

This was a load of crap ... we have to look at this through the broader lens of what could happen if these banks fail. Who gives a flying f*ck about the broader lens. You don't get to sc*ew us for your greater good.

Geitner is laughing as he trickles down on us.

[sonofsamphm1c]

So you don't care if American wealth drops by another 5 to 10 trillion and unemployment gets added to by another 4 to 8 percent? Just as long as your anger is assuaged somewhat, you're okay with that level of destruction to the innocent bystanders all around you?

[beaupritchard]

While there are millions of ways of being wrong ... there's not just one way of being right. That's being generous and asuming Geitner has a way of fixing this problem that is right.

There are other choices out there that do not involve taxpayers getting the short end of the stick. I would actually like to see some one like Warren head this effort than someone with entrenched interest like Geitner.

Long before people at the bottom see any relief in ths , people who got us into this mess in the first place will be drinking 100 year old scotch. That's just wrong on so many levels.

As far as the destruction to innocent bystanders ... those who took the risk should sleep in the beds they made for themselves. The innocent would have been better protected by bypassing these "to big to fail banks" and addressing the problem from the bottom up through credit unions and local banks.

[toypiano]

You've summed up Geithner's "plan" perfectly. He wants to continue bankrupting ordinary Americans, increasing unemployment, and giving all the money to the very same rich men who ruined the world's economies.

Geithner = the end result of Reaganomics.

[RofWH]

"Geithner Admits Banks Aren't Lending Enough " is the headline. The story is that he told Elizabeth Warren that the banks were not lending as much as they should be.

Your headlines are getting worse. We know that the boss lady doesn't like Tim G., but that headline is just yellowish journalism. Get some integrity, HufPost!

[Viper]

And missed the part where he said "The Banks are well capitalized"

Regards

[benwha]

"The Banks are well capitalized"

hahahahahaha - good one!

[SeaKitten]

Gee, go figure. Banks get into trouble because of risky loans and the solution is to have them loosen up on lending?

[sonofsamphm1c]

i think everybody will settle for them lending prudently, which would mean not turning down people with good credit. Anecdotal evidence claims creditworthy borrowers are being denied loans.

[october2009]

I know first hand that someone with good credit and puts 20% down CAN get a loan today.

Money isn't being lent irresponsibly anymore to people who can't afford to pay it back. The market is naturally readjusting itself now... People are spending less, going into less debt and saving more of their money. This is all very good and definitely needed.

The market is doing what needs to be done, however our government is trying to interfere with it and distort it even more by forcing banks to lend, by artificially lowering interest rates, and by propping up failed companies.

As much as I disliked the Bush admin, I only blame the unregulated Federal Reserve Bank for creating way too much cheap money in our banking system.

They're the primary culprit that caused all of the distortions in our economy and misallocation of capital into unsustainable long-term projects in housing and lending. The cheap money caused the malinvestments that distorted our economcy, and the only way out of this mess is just to allow the bad investments to liquidate and for bankruptcies to occur.

Once we have that very needed and painful correction, everybody will get back to work and in a year or two we'd forget this ever happened and have a flourishing economy with a sound platform. However, all these bailouts and stimulus packages are just prolonging the agony and delaying the inevitable.

The unregulated Federal Reserve Bank is the primary culprit.

[toypiano]

Over reliance on credit, and bankster scams to profit from nonexistent money, is how the economy tanked in the first place.

"Credit" isn't what We The People need. We need JOBS.

It's not all about credit -- that's just code for corporate welfare at this point.

[CHARLESTHETENTH]

A credit score of over 800 does not guarantee instant approval for loans or credit cards...Th­e average wait seems to be in access or 30 days. So people with good credit are not getting the benefit of any of these bailouts where billions of dollars to Banks were supposed to ease lending. Where is all this money being kept....it­'s being horded by Banks and not at all being used to help the consumer. When is this going to change is any one's guess? In the meantime expect to see more and more people on the soup line. People should be upset when their taxpayers dollars are being squandered­...it will be business as usual for Banks and Wall Street. To much money given with to little accountability spells disaster for many Americans.

[david43a]

Exactly! I tell you, the only way these creeps are going to listen is for us to make them listen...
we need to start a revolt against these monied interests by hitting them where it counts.
NOT the ballot box!
Stop paying interest, stop borrowing money and default on your loans...
In other words, be just like the banks....
If you think this is not a "good" idea, then just wait a while, when you get laid off, it will all happen anyway, except that you will be in a deeper hole by then. Go ahead and play by the "rules" and see what that gets you. A 401K that is worth nothing, a home that is underwater, a car that costs as much in interest as the hardware and a job that is anything but secure. We tried to vote the change....
And we got the same....I say we should revolt against the money changers!
If you are timid, then just miss one month of payments on your loans...if 50% of the folks did this...
we would have change we could believe in!

[BikeFreak]

I agree with you.

Sadly you try to do the "right" thing and it doesn't pay off.

Greed has destroyed this country, and is continuing to do so.

[Viper]

well lets see they got here loaning more to us than they should of....


Personal debt is 100% of GDP, first time since 1929.

The Banks are losing money on their credit card businesses even with very high interest charges because of people not paying.. so the rest of us and its a requirement of FED Bank Regs, must make that up...

So lets do more of what is destroying the country.

I dont like taking up for the banks... but any kind of government regulation would have stopped this. The FDIC, the SEC or the rating agencies and so on.... Americians for 30 years voted for this... voted for trickle down, supply side, low tax rates at the top so greed was rewarded, outsourcing and buying cheap goods made in slave wage countires while our plants rusted and we deindustiralized and made the difference up with credit spending.

.
The Banks are part of the problem. U.S. Execs are paid 15 times more than anywhere else in the world...

But Americans shopping habits and running away from their responsibility in this mess is just as bad... We got the money... we spent at and we then defaulted on what we took and we stuck the banks with bad paper. Banks did not write the subprime loans.


Regards

[david43a]

What we should all do is the following, do NOT pay the interest on your loans!
If everyone who is being overcharged (the banks "borrow" the money with no interest from the government i.e. US!) by their home lender or car lender simply did not pay the interest we would soon have "change" we can believe in.
In my case I will call the auto loan folks and have them repo the car...I will by a cheap used car for cash
and rent a car when I need one for long distance. I have already done this... As I can not depend on my job being there next week, as the banks always seem to get theirs, no matter what criminal stuff they do, I have chosen to drop out of the entire, useristic, ponzi scheme that is "finance"
What, you say, about your credit score? oh no, i will not be able to borrow money at super high rates to buy things I cant afford! What about a home you say? Why do I want to buy something that could ruin me if the banks decide to pull another "crisis"! It is time to stop the money changers, no more borrowing!

[nikio1975]

My bank just yesterday turned me down for a loan.

[toypiano]

It helps if you don't actually need the money. If you do need it, a bank will be the least likely to help.

[Adub]

I don't want the banks to repay the TARP money so fast and be off the hook. The whole point is to get them lending to main street. Wall Street just wants to get the government, oversight, regulation, and everyone else off their backs so they can continue to raise interest rates, cut credit lines, say no to everyone, and continue to enrich their own coffers.

Obama/Geithner need to DEMAND that the banks lend money to this stalled economy. To hell with their profits and big payday for now. There will be time for that later.

[intelliwoman]

Did it occur to anyone that the reason there is no consumer lending is that

a. Consumers are belt tightening and most don't want to take on more debt; and
b. those who do want to buy a new car, purchase a new home, or get a loan can not qualify because of the rebound tightening of credit standards following the housing debacle

[sonofsamphm1c]

Both definitely factors.

[toypiano]

c. people who don't have jobs or healthcare aren't likely to loiter around banks, seeking loans.

[TJCole]

It's all one big crap shoot Geithner is so tied to preserving a corrupt inequitable predatory system he can't see the forest through the trees...

I watched him before the committee this morning and he just talked in circles...­told them what they wanted to hear without really saying anything..­.

[Kache]

Simple solution Tim. Drop the 5% interest on the TARP to 3% for community banks. Unlike the masters of the universe who get TARP because they are too big to fail, community banks must be solvent to borrow TARP. Give the community banks and credit unions, the real bankers, a discount and watch them take the commercial loans & auto loans away from the bankers who think it's all a game. The deposits will follow those loans. In the end we'll have a solid banking system and the big guys will be history. Just rebuild it all from the ground up, one loan at a time. Give the discount to the small banks and this recession will be over before Christmas. Like Bill Gates said, "The more money you have the easier it is to make more money. That's upside down. The more you make the harder it should be. We need to find ways to make it easier at the bottom."

[jake1492]

Right. If it is necessary to provide funds to ensure credit availability, applly them in a way that rewards good management and doesn't reward bad management. Compete with these incompetently run banks using existing infrastructure.

[sonofsamphm1c]

Just remember, at the bottom were both George Bailey and Henry(I think) Potter, and the good guy won because it was a movie.

[stringer]

Just replace Geithner with Paul Volcker already. There's a pro-active solution. It doesn't involve merely firing the guy, it gives you an actual replacement. Heck have them swap jobs if you want to save face and not embarass Geithner.

Make Geithner the Chairman of the Economic Advisory Board and put Volcker in a position with some teeth where he can be heard and the Larry Summers/Geithner combo can't overrule every word he says before he has a chance to get a sentence out of his mouth.

Obama claims to idolize Lincoln. Ask Lincoln about reshuffling cabinets. He had to do it more than any other previous president. Ditto Roosevelt.

Sometimes people can be good, smart people but simply not in the right position. That's the case with Geithner. Time to move him, rather than waiting around another 2 years until it's clear to everyone that he's an economic George McClellan. Promises more than he can deliver.

[sonofsamphm1c]

Simply not an apt analogy. Geithner has attacked in force on multiple fronts. From where do think the green shoots people started talking about came? The results will not instantaneous. It's a campaign of attrition.

[Doubledoot]

All bank assets should have been cleared : sold off ; before we (the taxpayer) gave them a dime ! If you combine the TARP monies and the Pork Stimulus Package moneies to pay off everyones mortgage over the age of 21, making less than $70,000. a year and all consumer credit card debt. You would have inundated the banks w/ money : They would have been flush. Those banks too big to fail should have been immediately nationalized and broken up.any bank still in trouble could have been " managed bankrupt" . Carefully allow it to fail and go out of business or sell it to the highest bidder. They are making way too much out of this mess and have confounded it 100 fold by throwing money at the black hole ! Share holders might have taken a hit but that's what you get when you gamble in the stock market. GM could and should have had an electric hydrogen hybrid on the market by 1981 instead they went for short fall profits in a dieing market. They are more interested in inventing markets than better auto that ppl want to buy. They need an innovator running that co. instead of a wall street dufus ! W/ mortgage & Cr. card debt eliminated the consumer would have been freed to spend generating solvency for business and tax revenues for State and Federal. Until the consumer is able to consume again the economy will remain in limbo !

[Viper]

And you have accounting , business degress, own a busness... ?

For example personal debt, mostly mortgages and cars... (credit card one trillion) is 14 trillion. 90% make under 70K.. so that would cost around 10 plus trillion..­. Of course, I would quit working so I would qualify... reduce my income for a year.. and so would every one.

And what would people spend their money on... on stuff made elsewhere so that we would be right back to where we are in ten years.. no improved infrastruc­ture..no reindustri­alization/­MFG jobs...

What a non factual rant...

And where would GM fill up its Hydrogen feul cell cars? Thye actually have spoent 20 years on Hydrogen feul technology­.. they may have the best...


They have like everyone else test ones on the road.. with sales only in LA area in 2011. The VOLT is designed to have the GEN/Bats replaced by a Hydrogen feul cell... in the seond year.. but again... no Hydrogen refueling stations.. will just be atest bed for years.


regards

[THEPILGRIM]

hey Viper could you spell out your math, you don't make any sense!

[Paul Hackett]

Your post makes absolutely no sense as a response to what Doubledoot posted above. I have no idea what you are trying to say but I can't see any link between what you're saying and what he originally said.

[amessenger]

Elizabeth Warren did an interview on Jon Stewart's Daily Show last week. She explained that Paulsen had distributed the TARP under the conditions of no questions and no recourse. The American Public would be the creditor exchanging their money for 1 to 1 stock shares in AIG, CG and BOA, as well as others.
BUT------the stock market nearly collapsed and that payback ration, (proportionate to the stock value) changed to $66 on the hundred.
While I am glad to see that there has been some payback activity by BOA, CG, and Chase, all have made profits that should have been, (to at least the extent of 50%) channeled into TARP repayment for this first quarter. This was a Bail Out,
not an advance in their Bonus.
But NO! That's not the good part, the good part is that they are diluding their stock and offering it up for sale now that the value (is that a misnomer?) is rising.
Small Business needs to turn to small community banks and credit unions, the hogs are just going to blast-off the fees and rates for their plastic, leveraging them all over again and giving the desperate consumer little choice for survival but to except the loan shark terms and then file for bankruptcy.

[Bitter Business Bureau]

Charge Paulson with TREASON. It is a fully legitimate charge and apropos considering the payout to Foreign Banks.

Don't you find it Telling that during this Crisis, as Paulson was claiming the World Financial system was going to collapse; he held out for IMUNITY?

We can and should charge him with TREASON.

BBB

[Viper]

You dont understand the prupose of TARP... It was to increase the money supply.. thats why they dont want it returned yet... inflation of asset values has not yet started ..


And yes Banks by definition as their assets are devalued are legally required to contract their credit businesses­... amount of loans... so that is also part of the reason...

I dont like Paulson. His economic policies for the last 30 years led us to this. But his TARP ( not done real well) and the actions of Bernake (off to a slow start and his interest increases to fight oil induced inflation .. help initiate this.. but it was coming anyway) may have saved us from a bigger disaster. Dont be suprised if this guys along with Sommers and Gesthner end up with a Nobel prize in Economics if they can pull this off. The bigger problem is we de industrial­ized...hav­e no real jobs left and no nation other than after WWs has reindustrialized and not w/o a government doing central planning/i­ndustriali­zation policy/pro­tectionism­.

Regards

[sonofsamphm1c]

When Bernanke started raising interest rates I nicknamed him BurrSankyit. But since then he has been picking up his game.

When GWB says he had to go against every fiber in his body to go along with TARP, well, just sayin'. Not doing TARP would have been a national catastrophe like none other.

[Kache]

Hate to break this to you messenger, but - TARP bought preferred stock, not common stock. The TARP is a loan at 5%. It is not market stock and by law gets paid off before common stockholders get dividends. That is why common stock values fell, common/traded stockholders can not get paid until after the TARP loan is paid off. As for no recourse, we have the same rights as any preferred stockholder, we can sieze and liquidate the company completely, wiping out the common stockholders (the other reason the common stock fell). What other recourse is there?? Do you think maybe the bankers are holding baseball trading cards that we can't get our hands on?

[tydicea]

Not lending enough and in the case of B of A and Chase raising the APR on unsuspecting customers from whatever the beginning rates were to in excess of 26%. I'd like to have my tax dollars back that went to prop these banks up.