Neil Barofsky, Special Inspector General of the Troubled Asset Relief Program (a.k.a. the SIGTARP ) caused quite a stir in Washington last week when he released a quarterly report that attempted to tally up the total dollar amount of federal government commitments related to the bailout. Those commitments include federal government programs that spend taxpayer money or issue loan guarantees in an attempt to rescue financial services institutions and support the economy. While the administration and the media have focused on the $700 billion in bailout funds explicitly authorized by Congress, Barofsky tried to bring a little transparency to the complex array of federal programs including those of the Treasury and the opaque Federal Reserve. His report put the potential outlay of taxpayer dollars of the combined 50-plus programs at an astonishing $23.7 trillion.
The $23.7 trillion represents the first attempt by anyone in the federal government to provide a little "truth in lending" regarding the real, maximum cost to U.S. taxpayers of the bailout. To put this number in perspective Politico noted that the figure was larger than the total cost of all the wars the United States has ever fought, not to mention double the U.S. Gross Domestic Product.
To be clear, this number represents the maximum potential outlay. Not all of this money will be spent and some funds may be recouped. Barofsky reports that only $441 billion has actually been spent so far. Of course, even $441 billion is a huge outlay.
Administration spinmeisters promptly attempted to belittle the report. Most amusingly, a spokesperson from the Treasury Department characterized the numbers as misleading and inflated, even though they were generated from Treasury’s own data, and department officials had read and commented on Barofky's report prior to its public release. For Barofsky’s response to the administration spin, check out his interview with ABC’s Jake Tapper.
This all would have been a short-lived kerfuffle in the halls of Washington except that the Washington Post recently reported that Treasury has asked the Department of Justice to issue a ruling placing the SIGTARP office more directly under the control of the Secretary of the Treasury, Timothy F. Geithner. This move clearly aims to undermine Barofsky’s independence and give Geithner the authority to quash the release of information from his office. No word yet from Justice on whether or not “truth in lending” will be official administration policy.