Congress must get in the game on the bailout, provide oversight, accountability

The Obama Administration’s plan to bailout ailing financial institutions as described today by Treasury Secretary Timothy Geithner is an improvement over the Bush Administration’s approach. However, the plan still seems to be a work in progress as it lacks specifics in many areas and leaves the issue of foreclosure prevention for another day.

“We applaud the movement toward greater transparency and accountability, but Congress still needs to get in the game,” said Common Cause President Bob Edgar. “Congress must provide rigorous oversight of the bailout to ensure that this time it does right by the American people, not just the financial institutions.”

It is still unclear whether the plan presented by Secretary Geithner requires banks to report on their spending with sufficient specificity. The plan does not contemplate removing executives of failed institutions, even as many of them presided over the current collapse. And it only puts pay caps on the very most senior executives.

Despite Geithner’s laudable new measures, Congress must pass legislation that includes conditions on the recipients of bailout money so that the American people know exactly how their money is being used, and are assured it will go toward helping taxpayers and their communities.

The House already passed legislation (HR 384) that provided an excellent roadmap for oversight of the bailout and accountability for bailout recipients, but the Senate failed to follow suit.

In the Senate, the Taxpayer Protection Act (S 195), similar to H.R. 384, would require Treasury to provide a detailed monthly report to Congress about how emergency economic assistance was being used by recipients. It would also give the government the right to audit any information that may be relevant to the assistance. The bill would also take the obvious step of creating a Financial Market Investigation and Reform Commission, modeled on the 9/11 Commission, to investigate the causes of the collapse of the financial system and give recommendations for how to prevent it from happening again.

Members of Congress must take the best of both these bills and do their jobs: pass into law what America demands for our taxpayer dollars.