Kucinich subcommittee to question Treasury’s Kashkari on TARP

Assistant Treasury Secretary Neel Kashkari, will be testifying before Kucinich’s Domestic Policy Subcommittee on WFT Treasury’s changing evolving stories plans for the $700 billion bailout "troubled asset relief program" (TARP).

Today at 10 am, the Kucinich’s House Committee on Oversight and Government Reform, Domestic Policy Subcommittee will hold a hearing “Is Treasury Using Bailout Funds to Increase Foreclosure Prevention, as Congress Intended?

Kashkari, calls himself a "free-market Republican," runs Treasury’s new Office of Financial Stability and is responsible for TARP. Kashkari has been at Treasury since July 2006. Prior to following Paulson to Treasury, Kashkari was VP of IT Security Investment Banking at Goldman Sachs.

From the Committee’s website:

Congress established the $700 billion Troubled Asset Relief Program on October 3, 2008 to deal with the financial crisis. One of TARP’s core functions was to prevent future foreclosures through the acquisition of mortgage-related assets, such as whole loans, mortgage-backed securities and other financial products, and the implementation of a plan to stem foreclosures on those loans. In creating TARP, Congress was aware of the efforts of the private mortgage servicing industry to prevent foreclosures, and committed an extraordinary sum of taxpayer funds to expand upon those efforts. On November 12, 2008, Treasury Secretary Henry Paulson announced that TARP would not acquire mortgage-related assets. In light of this significant change in TARP’s mission, important oversight questions arise.

From USAToday:

With the economy falling into what could be the deepest recession in decades, the government is struggling to find a coherent way to quickly help homeowners and businesses — and the clash of politics and economics is hitting a fever pitch.

The administration is still working on the best way to deploy the remaining money in the $700 billion financial rescue plan passed last month. Treasury Secretary Henry Paulson said Wednesday that the government will no longer buy troubled assets from bank balance sheets, the original intent of the legislation, and will mainly focus on injecting money into the financial sector.

For background on the economic / financial crisis and the Bush Administration’s response, see Hugh’s List item #87.

Live coverage at CSPAN (direct reaplayer link) and the committee website.

Witnesses:

panel 1:

  • Neel Kashkari, Interim Assistant Secretary for Financial Stability and Assistant Secretary for International Economics and Development, Department of Treasury

panel 2:

  • Michael Barr, Former Deputy Assistant Secretary for Community Development, Department of Treasury, University of Michigan Law School & Center for American Progress
  • Anthony B. Sanders, W.P. Carey School of Business, Arizona State University
  • Alys Cohen, National Consumer Law Center
  • Larry Litton, Litton Loan Servicing LP
  • Stephen Kudenholdt, Thacher Proffitt & Wood
  • Thomas Deutsch, American Securitization Forum

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