Cost of rescue plan keeps on growing
Speaker of the House Sen. Nancy Pelosi speaks during a news conference with House Financial Services Committee chairman Sen. Barney Frank on Capitol Hill Sept. 26, 2008.
TEXT OF STORY
I don't know if you noticed, but we've been talking about the bailout plan for, what, four minutes now?
And nobody's said the words Treasury Department or Henry Paulson.
That's not us missing something.
It's just the politics of it.
The Treasury Department's rescue plan is looking a whole lot different than what was sold to Congress in September.
And with so much taxpayer money on the line, our Washington bureau chief John Dimsdale reports the tab's getting bigger than lawmakers ever imagined.
Only $20 billion of the $800 billion in taxpayer loans announced today comes from the congressionally approved TARP bailout. The rest will be put up by the Federal Reserve Bank. And Bob Eisenbeis, who used to be an economist at the Atlanta Fed, thinks he knows why.
Bob Eisenbeis: It's all money out of the same pot in a sense. Except one doesn't have to get approval from Congress to use the Federal Reserve's balance sheet.
Eisenbeis says the Treasury Department wants to keep the bailout money in reserve for the next administration. Roughly half of that $700 billion has been committed. But with all the changes in the bailout, New Jersey Republican Representative Scott Garrett says Congress is feeling some buyer's remorse. He voted against the bailout because he didn't think there was enough accountability for taxpayer money.
Scott Garrett: I think most people who voted yes thought that they were buying a certain program. That is, buying mortgage-backed securities and that was it. Now, of course, they see "Wait a minute, it wasn't that, it went to something else, went to something else, and maybe it's back to buying mortgage-backed securities. And oh, by the way, the Federal Reserve is doing it too. So, I think the people who voted yes are probably going to be the ones leading the charge, saying "Wait a minute. Let's take a second look at what we authorized here."
And members of Congress know there's an extra reason they'll be held responsible for the success or failure of the taxpayer bailout says Bob Eisenbeis.
Eisenbeis: The current administration is not going to be around when that assessment takes place.
In Washington, I'm John Dimsdale for Marketplace.