By Silla Brush - 07/21/10 04:10 AM EDT
The federal government's overall support for the financial system surged to $3.7 trillion during the past year, according to a top government watchdog.
Neil Barofsky, the special inspector general over the Troubled Asset Relief Program (TARP), reported that the increase in assistance — up from $3 trillion in 2008 — came despite ongoing efforts to wind down the $700 billion financial rescue package.
Barofsky took the Obama Administration to task for the increase, calling the commitments "the equivalent of a fully deployed TARP program, largely without congressional action."
The report cited new commitments and pledges for the housing market, Fannie Mae and Freddie Mac and other financial institutions to explain the $700 billion increase in support.
The report noted that the $3.7 trillion figure does not necessarily represent the total financial risk to the government, since many federal programs require collateral and others have overlap.
The report was sharply critical of the Obama administration's efforts to reduce home foreclosures and shore up the housing market. Barofsky concluded that the administration's main housing program "continues to struggle" and that the number of permanent loan modifications under the program is "anemic."
Roughly 12 percent of eligible delinquent loans have received a permanent modification under the program, according to the latest Treasury Department data.
Barofsky said Treasury has failed to adopt a new system of goals and benchmarks for the program.
"Treasury's refusal to provide meaningful goals for this important program is a fundamental failure of transparency and accountability that makes it far more difficult for the American people and their representatives in Congress to assess whether the program's benefits are worth its very substantial cost," the report reads.
Rep. Darrell Issa (R-Calif.), the top Republican on the House Committee on Oversight and Government Reform, criticized the Obama administration's housing efforts and its use of TARP funds.
"The fact that the Obama administration is treating TARP like its own personal slush-fund is beyond egregious and a complete betrayal of what the American people were told would be then when their tax-dollars were used to bailout Wall Street," Issa said.