Common Cause calls for passage of Frank bailout bill

Common Cause on Thursday released a letter urging members of Congress to pass H.R. 384, the TARP Reform and Accountability Act of 2009 introduced by House Financial Services Committee Chairman Barney Frank (D-MA). The legislation would place restrictions on how the Treasury Department spends the second half of the $700 billion financial bailout funds. Both the House and Senate are expected to vote in the coming days on the release of the bailout money.

The letter to all members of Congress points to similar provisions in the Frank bill and a written request from Larry Summers of the Obama Administration asking Congress to release the second half of the bailout funds. Both show a desire to increase the transparency of the bailout program as well as increasing accountability for the recipients of the money. The Bush Administration’s handling of the bailout program has been criticized for its lack of transparency and monitoring.

“The Summers letter expresses support for many of the same provisions that exist in the Frank bill, except that where the Summers letter is vague, H.R. 384 is more specific. There is enough flexibility built into the Frank bill to allow the Treasury Department to change course if necessary, while ensuring that Congress plays the appropriate role in this process, rather than acting as a automatic teller machine for the executive branch, as it has done so frequently over the last eight years,” says the letter.

The letter also notes the constitutional role of Congress in overseeing the executive branch and the need for statutory language controlling how the bailout money is going to be used to prevent residential foreclosures and control executive compensation.

According to the letter, “we believe Congress has failed in its constitutionally mandated role of overseeing the executive branch in the past, with costly results. Congress should make clear requirements of the Treasury Department in the form of legislation if it is serious about overseeing how this money is being used.”