By Peter Roff Senior Fellow, Institute for Liberty/former Senior Political Writer, United Press International
As we have all realized by now, there is no quick or easy way out of the current financial crisis. A considerable body of opinion holds that the actions our government has taken so far has, rather than ease the pain, made things worse.
Shortly before Congress acted to approve the Democrats' economic stimulus package the non-partisan Congressional Budget Office said the increase in government indebtedness it would create over the long term would crowd enough private investment out of the U.S. economy to reduce Gross Domestic Product over the next decade by more than if the government had done nothing.
The only way to really restore the confidence of the American people in government to address the current economic crisis is to make them part of the process. Rather than requiring them to remain dependent on the best intentions of Congress and the president, they must be allowed to see for themselves how the stimulus money is being spent beyond what current law allows.Judd Gregg
Whatever the economic data indicate, America is suffering from a crisis of conscience in its financial markets and institutions. There is a growing sense that Washington is simply throwing money at the problem without any sense of accountability in the hope things will get better. And without accountability, it will be a long time before confidence is restored.
Every inept presentation by Treasury Secretary Timothy Geithner, every piece of political pork a taxpayer watchdog group finds in the stimulus or the budget, every effort by Obama to make light of the situation only reinforces the idea that the economy is headed deeper into the ditch. One need look no further than the way the nation responded to the retention bonuses paid to AIG executives to see the truth in this.
Yes Congress approved the bonus payments, thanks to Senate Banking Committee Chairman Christopher Dodd, who helped make sure they were part of the stimulus. And yes, the effort by Congress to tax those bonuses retroactively is dumb and sends the wrong signals to the financial markets -- in addition to probably being unconstitutional. But plenty of blame also lies with House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid who knew the only way to get the bill passed was to ram it through Congress before anyone really had a chance to know what was in it because, as we have found repeatedly in recent days, there were a lot of individual items that would have helped the Republicans pick it apart.
The only way to really restore the confidence of the American people in government to address the current economic crisis is to make them part of the process. Rather than requiring them to remain dependent on the best intentions of Congress and the president, they must be allowed to see for themselves how the stimulus money is being spent beyond what current law allows.
A piece of legislation crafted on a bipartisan basis by New York Democrat Carolyn Maloney and Republican Peter King would do a lot in this regard. H.R. 1242, the "TARP Accountability and Disclosure Act" would increase oversight and ensure transparency in the spending of the $700 billion in the Troubled Asset Relief Program authorized by Congress last fall. It's a good first step toward making all the economic recovery spending more transparent to the same U.S. taxpayers who are being forced to foot the bill.
The legislation, as Maloney and King explained when introducing it, requires the creation of a centralized, Internet accessible public database system in a consistent, standardized format within the Department of Treasury, so that TARP funds will be easily visible and traceable.
Such a program would allow the use of currently available technology to provide "a complete picture of how TARP funds are being used in near real time," Maloney said, not to mention provide a needed boost in taxpayer confidence. As the two members of Congress point out, the TARP data is currently distributed among 25 different federal agencies including the SEC, the Federal Reserve, the FDIC and the Commodities Futures Trading Commission -- few if any of which use the same systems for recoding it.
Under the Maloney-King legislation, the U.S. Treasury would be required to combine the reported government data with data collected from independent sources. These sources include news articles, corporate profiles, corporate press releases and other financial information not created by the U.S. government.
The idea here is to create "as full and complete a profile as possible of (an) institution's financial application of TARP funds," the members say, and to provide "the crucial ability to monitor inconsistencies in near real time that could indicate the misuse of such funds at both the corporate and individual officer level."
The American people are losing faith in their government's ability to keep a handle on the TARP spending. And this affects the ability of Congress and the President to address the economic crisis. Adding a greater degree of transparency to the process may be just the thing to get Wall Street, and Washington, to behave in a more honest, more forthright way. It may also help them regain, and then force them to maintain the confidence of the people who are being asked to pay the bills.
Peter Roff, a former senior writer at United Press International, is a senior fellow at Frontiers of Freedom, an organization that advocates for educational freedom and reform.