TARP Inspector: “Too Big to Fail” Continues

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The Dodd-Frank financial overhaul law that passed last summer will effect several government agencies. As officials grapple with implementing the bill, several groups are calling into question the cost of executing the program and asking if the bill addresses the key Wall Street problems that it was tasked to fix. The House Oversight Committee held a hearing this morning to review the costs and implementation of the law.

Outgoing TARP Inspector General Neil Barofsky, who has been critical of the program recently, continued that theme before the committee. This hearing happened on his last day in his job. Barofsky also stated that the “too big to fail” problem has not been solved by the Dodd-Frank law, and he is especially critical of the efforts to help struggling homeowners.

In a separate panel, Assistant Treasury Secretary Timothy Massad discussed the help the government is doing for struggling homeowners, and the homeowners mortgage assistance program (HAMP). The House this week killed funding for HAMP, although Senate passage is unlikely. In addition, 50 House Democrats wrote Geithner urging him to reform HAMP.

The federal government is projected to spend up to $1 billion in 2011 to implement the financial overhaul law, according to a new Government Accountability Office (GAO) report.

House GOP members used the figures in today’s GAO report to support their argument that the new law will be counter productive on the economy.

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