ABC News’ Matthew Jaffe reports: House Republicans today asked new Treasury Secretary Tim Geithner to answer a series of questions before he outlines how the administration will distribute the second half of the $700 billion Troubled Assets Relief Program (TARP) and possibly requests more money to bail out struggling banks.
"What is the exit strategy for the government’s sweeping involvement in the financial markets?" ask top GOP House lawmakers, including House Minority Leader John Boehner and Minority Whip Eric Cantor, in their letter to Geithner.
The distribution of the initial $350 billion of TARP funds was widely criticized. Geithner, who has vowed to improve the accountabilty and transparency of the embattled program, is set to announce Treasury’s plans for the second tranche of money next week, but the administration may deem more funds are necessary to save the financial sector. One option could be establishing a ‘bad bank’ to help banks weighed down by toxic assets.
"Because the Administration has committed itself to assisting the auto industry, satisfying commitments made by the previous Administration, and devoting up to $100 billion to mitigate mortgage foreclosures, it has been reported that President Obama might need more than the $700 billion authorized by the Emergency Economic Stabilization Act (EESA) to fund a ‘bad bank’ to absorb hard-to-value toxic assets," write the GOP leaders.
"In light of these commitments – which come at a time when the Federal Reserve is flooding the financial system with trillions of dollars and the Congress is finalizing a fiscal stimulus that is expected to cost taxpayers more than $1.1 trillion – it is not surprising that the American people are asking where it all ends, and whether anyone in Washington is looking out for their wallets," they ask.
In January, the House voted against releasing the second tranche of TARP funds at the request of President Obama, but the money was released anyway by the Senate.
Last week, Democrats pushed the massive $819 billion stimulus package through the House, despite no Republicans voting for it even after Obama had gone to Capitol Hill to court GOP support the day before the vote.
The Senate is now debating its own version of the stimulus bill.