The Congressional Oversig ht Panel for Economic Stabilization has released its first report on the $700 billion Emergency Economic Stabilization Act. 

Read the full report here

Taxpayers for Common Sense staff are reading through the report now.  Stay tuned for updates.

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Update 5:40 pm:

Page 27 Why haven't the banks under the Capital Purchase Program had to submit business plans like the Big Three Auto Companies?  No one knows “whether there have been any efforts to assess the business plans, the management, or the accounting and general transparency” of the banks receiving aid.

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Update 5:30 pm:

As part of its aid agreement, Treasury made Citigroup participate in the FDIC’s mortgage modification program. Why hasn’t it made the other 160 banks that have received or are scheduled to receive money through the Capital Purchase Program (CPP) implement the same program?

At the very least, as a condition of receiving CPP money, the banks should have to report data on “delinquencies, foreclosures and loss mitigation in a standard format.” This would allow the appropriate agency the chance to evaluate the effectiveness of each institution’s foreclosure prevention efforts.

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Update 5:15 pm: 

Page 16 – “Every Time a family loses its home due to foreclosure, the value of every home within one eighth of a mile declines by nearly 1%.”

Page 13 – The COP report asks a good questio n about the Treasury Department’s bailout investment strategy. The report states, “Efforts to increase the availability of credit assume that the fundamental problem is a lack of liquidity.” But then the report raises an important point, “Americans are most worried about their own economic security – their employment prospects, their current expenses and their debt levels – then increasing liquidity will have little impact on consumer spending.”

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Update 4:45 pm: 

Rep. Jeb Hensarling (R-TX), one of the members of the Congressional Oversight Panel for Economic Stabilization, and a strong fiscal conservative, has not endorsed the COP report. In written testimony, he said that:

“In order to be an effective advocate for the American taxpayer, I have to ensure that every (COP) panel member has the resources and rights necessary to conduct effective oversight. I must also ensure that the panel officially adopts a serious agenda that truly brings transparency and accountability to the process. I have raised my concerns but thus far, I assume due to the exigency of the circumstances, they have yet to be addressed. The report being issued today included many good points and questions that I agree need to be asked of Treasury. I was, however, particularly concerned about language that could be interpreted as a panel expectation that Treasury should make credit more expensive and less available for Americans and could delay the recovery of our housing market at exactly the wrong time in our nation’s economic history.”

Read his full written testimony

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Update 4:3 0 pm:  (Page 5) – I know this fact is out there, but one of the startling facts in the introduction of the report is that one in 10 of mortgages are in default. Very startling number.

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Update 2:15pm:  On page 20, the Congressional Oversight Panel for Economic Stabilization points out that Britain is ahead of the U.S. in monitoring where their bailout money is going. The report states that “if the funds committed under TARP have an intended purpose and are not merely no-strings-attached subsidies, then it seems essential for Treasury to monitor whether the funds are used for the intended purposes.”

Without this oversight it is impossible to determine if the bailout and the Treasury revitalization strategy is succedding. Already, an effort like this is underway in Britain where they have required recapitalized banks lend to small and medium sized companies. To determine effectiveness, the Brits are using 2007 levels of lending as a comparison.

Sounds like a good start.

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