In 2008 and 2009, 50 separate Federal programs offered $23 trillion in loans, grants, or asset guarantees to the financial sector. Huh! This item was buried in paragraph 11 of 12 paragraphs in a joint statement that California Senator Barbara Boxer and Virginia Senator Jim Webb issued demanding taxing TARP monies executives used to compensate themselves. That's more than 30 times more than the official $700 billion that Congress authorized to bail out the big banks and failed Wall Street financial houses. The $700 billion figure tossed out quickly became etched in financial stone. Then President Bush, President Obama, Congress, and the Wall Street and banking industry and every financial pundit cited the $700 billion payout as the maximum that taxpayers would be stuck with. Now almost as an afterthought, Webb and Boxer casually toss out the $23 trillion number.
Boxer and Webb made mention of it in a press statement to bolster their call for passage of the Taxpayer Fairness Act. This would levy a one time 50 percent surtax on bonuses on amounts over $400,000 in compensation and bonuses that the big banks and firms ladled out to their executives. Don't hold your breath on this one, though. Boxer, Webb and the Senate was unwilling to impose this tax on the obscene bonuses that the big bank execs paid each other as a condition of getting the TARP money. The only thing that's changed since then is that public fury at the non-stop record bonuses they pay each other has risen to fever pitch. And even if there was a congressional epiphany and payment required, the big banks that got the taxpayer cash will argue as they have every time a squawk is made about their obscene money that they've paid the money back.
Boxer and Webb's move smacks of yet another empty gesture by two Senators feeling election heat to tap into popular rage at the bankers by appearing to be anti-Wall Street crusaders.
The outrage, though, should be over whether Boxer, Webb, the White House and Congress have come clean over how much the banks and financial houses dinged taxpayers for. One, two, or three federal agencies involved in the fed giveaway is one thing but fifty different agencies is another. The agencies that may have shoved more money to the banks and houses were known as early as April, 2009. In testimony before the House Oversight and Government Reform Committee Tarp's Inspector General listed the agencies and the projected dollar amounts.
Federal Reserve 6.8 trillion
Treasury Non-Tarp 4.4 trillion
National Credit Union, Veterans Affairs, the Government National Mortgage Assn, the Federal Housing Administration, Federal Housing Finance Agency
Federal Deposit Insurance Corp (FDIC) 2.3 Trillion
US Treasury 7.4 trillion
Several house reps screamed loud then that the treasury was mute silent or had stonewalled every effort made to find out exactly how much of the cash that the treasury actually doled out to the banks and financial houses. Nearly a year later they still really don't know. The issue from the beginning has been transparency or the absence of it by the treasury. Congress has failed to force the federal agencies to tell what they have spent, and how they spent it. At the time of his congressional testimony last April, the Tarp inspector general had 35 criminal and civil investigations of banks and financial houses for accounting fraud, securities fraud, insider trading, mortgage service misconduct, mortgage fraud and public corruption false statement and tax investigations going. This wasn't enough to trigger bells and whistles that treasury had grossly low balled the figures on the bailout.
Boxer and Webb had ample opportunity to demand and fight that the treasury and other federal agencies fully open their books on the amounts that were being spent. The White House and Congress have repeatedly publicly assured that bail out money ladled out came in way under the official $700 billion that Congress authorized, and that much of the money has been repaid. That still doesn't tell what other help the big banks and financial houses got in the form of loans, grants, insurance or asset guarantees, and what federal agencies were involved. Boxer and Webb haven't told us that either.
Earl Ofari Hutchinson is an author and political analyst. His new book is, How Obama Governed: The Year of Crisis and Challenge (Middle Passage Press).