Accountants needed at the Treasury
From the Washington Post:
With the announcement of its $6 billion investment to stabilize GMAC, the Treasury Department has now spent or committed more money than Congress has allocated to its financial rescue program, effectively making more promises than it can afford to keep.
The scorecard: Congress gave Treasury $350 billion; Treasury has allocated $354.4 billion. The department acknowledges that it needs Congress to approve the second half of the $700 billion rescue package simply to meet its commitments, let alone to address new emergencies. If Congress blocks the additional funding, as some members say they want to do, Treasury could be forced to break promises.
The situation gives increased leverage to those in Congress demanding concessions from Treasury, including greater transparency, restrictions on the use of the money and an ironclad guarantee that a significant portion is spent to reduce foreclosure.
` RW: I suspect that Congress will not force the Treasury to back out on its commitments. Can you imagine the headlines that would surround that story? “The Treasury takes back Christmas”, “Paulson: makes more promises he can keep,” “Treasury bailout a sham?”, etc., etc.
Something to think about: according to the Congressional Budget Office, the President must submit a detailed plan for the final $350 billion to be approved by Congress after a 15-day review. Therefore, and as I understand it, Congress must approve the full amount ($350 billion) rather than an a la carte $4.4 billion. We will see what happens, but it could take a while – holiday, plus Bush’s detailed plan, even longer if it’s Obama’s detailed plan.
Originally published at the News N Economics blog and reproduced here with the author’s permission.