TARP funds are unlikely to be fully repaid, program’s watchdog says

It’s ‘extremely unlikely’ that taxpayers will see a full return on their
investment, Neil Barofsky, special inspector general for the Troubled
Asset Relief Program, tells the Senate Banking Committee.

By Alexander C. Hart
September 25, 2009
Reporting from Washington

The Treasury is unlikely to get back the full amount of money lent under the Troubled Asset Relief Program despite a recent spate of repayments from large banks, warned the program’s watchdog.

The program “played a significant role” in rescuing the financial system from a meltdown, Neil Barofsky, special inspector general for TARP, testified before the Senate Banking Committee on Thursday. But it was “extremely unlikely that the taxpayer will see a full return on its TARP investment,” according to his prepared testimony.

Losing some money was almost inevitable, said William Goetzmann, a finance professor at the Yale School of Management. “The intent of TARP investment was not that it was a great investment for the U.S. taxpayer,” Goetzmann said. “The intent was to save the U.S. financial system, and that was going to cost some money.”

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Planes to nowhere? Congress plans to increase small-town airline subsidies

The Essential Air Service spends as much as thousands per passenger in remote areas. Critics say the program is wasteful and was to be phased out after a period of adjustment to ’70s deregulation.

By Alexander C. Hart
September 19, 2009
Reporting from Washington

Ely is a Nevada mining town with a population of 4,000. Located about a four-hour drive north of Las Vegas, it is perhaps most famous as the birthplace of former First Lady Pat Nixon.

Ely also is a beneficiary of Essential Air Service, a federal program established in the 1970s after airline deregulation to prevent small communities from losing access to air travel. But opponents call the program wasteful spending, noting that much of the money provides service to areas with fewer than 30 passengers a day.

This week, the Senate passed a transportation bill that includes a $38-million funding increase for the program, which now stands to receive $175 million.

In 2008, according to Senate Appropriations Committee data, Great Lakes Airlines received a subsidy of about $1.8 million for the 414 passengers it flew to and from Ely — about $4,500 per person.

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Their Incumbency is Ended (But Their Earmarks Linger On)

More than 50 members of the House of Representatives lost or gave up their seats in this past election cycle. And this year’s Senate sees 14 new faces replacing departing Senators.

But despite all these personnel changes, H.R. 1105 (the omnibus appropriations bill) bears the marks of the 110th Congress, not the 111th. Among the more than 9000 earmarks are several hundred from people who are no longer members of Congress.

An ICT analysis shows that in the Senate, nine departed senators have 108 earmarks totaling just over $73 million in spending. When excluding Norm Coleman, who is in the middle of a court challenge concerning his opponent Al Franken’s apparent victory, the total drops to 99 earmarks and approximately $72 million.

In the House, 366 earmarks from departed representatives cost just over $170 million. 

These figures ignore representatives who became senators, but they do include members of Congress who joined the Obama administration.

Even though the members have moved on, these earmarks remain valid. “Earmarks from former members are treated the same as earmarks from
current members,” House Appropriations Committee spokeswoman Kirstin Brost said. “There’s no distinction.”

The earmarks persist because this bill is so long overdue — it was written last year and was “due” on October 1. But veto threats from then-President Bush held off its consideration until President Obama took office.

Leaving the earmarks from those who are no longer in Congress “was a decision that was made by [House Appropriations Committee chair] Mr. Obey,” said Jim Specht, press secretary for the committee’s ranking Republican, Jerry Lewis (Calif.). “They did it for both Republicans
and Democrats, and [Lewis] doesn’t have any issue with that.”

Specht further defended the earmarks, arguing, The earmarks support the districts, not the members.”  

Do you agree with Jim Specht that there is nothing wrong with these earmarks? Or should the new members be required to sponsor them? Tell us what you think.

More Fun with H.R. 1105 Earmarks

The big story of the day is S.160 (District Voting Rights) passing the Senate. In some ways though, the victory is bittersweet. Thanks to an amendment by Sen. John Ensign (R-Nev.), district residents face the irony of standing one step closer to being treated like all other Americans while simultaneously having a decision of their own government overturned by Congress. 

Ensign's amendment, the "Second Amendment Enforcement Act" effectively eliminates the district's gun registration laws. And some district residents are none too happy about it! (Warning, some language is rather colorful)

But in anticipation of the Senate taking up H.R. 1105 (the Omnibus Appropriations Act of 2009) on Monday, we're going to continue with our list of interesting earmarks, which we picked out from the commerce, justice and science section of the bill.

Earmarks after the jump.

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