Senate Finance will hold hearing on TARP

The progress of the $700 billion Troubled Asset Relief Program will be the focus of a Senate Finance Committee hearing on Wednesday. 

In June, the Treasury Department reported to Congress that TARP repayments had reached $194 billion, exceeding by $4 billion the total amount of outstanding debt of $190 billion. 

The outstanding debt doesn’t include $106.36 billion that has been committed to institutions but hasn’t been paid out yet. Considering that amount, total outstanding debt would be approximately $296 billion. 

Of the initial $700 billion, $489.88 billion has been committed to specific institutions, and $383.52 billion of that has been paid out by Treasury. The department said it does not expect to use more than $550 billion of the $700 billion program. 

Finance Chairman Max Baucus (D-Mont.) and other panel members will question witnesses Neil Barofsky, special inspector general for the Treasury Department; Elizabeth Warren, chairwoman of the Congressional Oversight Panel; and Richard Hillman, managing director of the Financial Markets and Community Investment Team at the General Accountability Office. 

Questions could arise over a recent report by Barofsky that says the Obama administration’s push to speed up the closing of General Motors and Chrysler dealerships could have added to unemployment, costing tens of thousands of jobs.

“Such dramatic and accelerated dealership closings may not have been necessary and underscores the need for Treasury to tread very carefully when considering such decisions in the future,” Barofsky said in the report. 

The Treasury Department criticized the report’s findings — TARP provided $80.7 billion to the two automakers — arguing that the companies faced failure without aid from the federal government. 

Warren is being considered to head up the new consumer protection agency created under the Wall Street reform bill. Liberal groups support her for the job but bankers and Republicans argue she could be too tough on banks and could further restrict the availability of credit. 

Senate Banking Committee Chairman Chris Dodd (D-Conn.) on Monday questioned Warren’s ability to get through the confirmation process if she’s nominated. “The question is, is she confirmable?” Dodd said in response to a question on NPR’s “The Diane Rehm Show.” “There’s a serious question about it.”