Geithner on Defense, TARP Criticism Grows

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Treasury Secretary Tim Geithner continued to defend the government's $700 billion bailout plan, Tuesday, saying the U.S. is still in a "very severe financial crisis."

There's just over $100 billion left in the fund and lawmakers are now questioning how the remaining money will be spent.

Geihtner opened the door to tough criticism about the administration's efforts to stabilize the financial system.

Tuesday's hearing coincided with the release of a new government report that cites problems with the $700 billion troubled asset relief program or TARP.

Asserting the program puts the public at an unfair disadvantage, the report to Congress lists about 20 criminal probes into possible public corruption, involving corporate, stock and tax fraud, mortgage fraud and insider trading.

Investigators say the Treasury Department isn't doing enough to track how banks are spending the government's money and they believe some banks may be guilty of "cooking the books" to tap into taxpayer funds.

"If our recommendations are unheeded, if these protections are not adopted it could very well be a fundamentally flawed program," TARP Special Inspector General Neil Barofsky claimed.

The program got its start under the Bush administration and has continued with President Obama. But it's grown so large in scope and complexity that it totals nearly $3 trillion in taxpayer and private funds.

Before a committee on oversight, Geithner defended the need for doling out TARP funding.

"Leaving that situation, that challenge unaddressed would have risked, in our judgement, a deeper recession, more damage to the productive capacity of the American economy," he said.

Still, not everyone is buying in.

"We are continuing to pour money into a leaky ship and it's still listing," said Sen. Sam Brownback.

Another sobering statistic from the report was that the inspector general charged with overseeing the program says most government programs lose about 10 percent to fraud.

In this case, that would equal about $300 billion, although the congressional budget office has estimated taxpayer loss in TARP could ultimately be as high as $355 billion.

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