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$700 billion bailout to get first audit

PostPosted: Thu Feb 09, 2012 10:16 am
by admin
$700 billion bailout to get first audit
« Thread Started on Dec 2, 2008, 5:48am »

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$700 billion bailout to get first audit
Posted: 07:15 AM ET
By David Goldman
CNNMoney.com
NEW YORK (CNNMoney.com) — The federal government’s $700 billion
financial rescue plan will get its first official review Tuesday.

The Government Accountability Office will present Congress with a report
Tuesday on the bailout’s progress and the Treasury Department’s handling of the
program. It is the first of a series of reports that the GAO must submit to
lawmakers on a bi-monthly basis, as one of three oversight components required
by the Emergency Economic Stability Act.

The bailout has received its fair share of criticism from lawmakers and
economists. Some argue that Treasury should require banks to use their capital
injections for lending to other financial institutions. With the credit markets
still largely frozen, Treasury had hoped the fresh capital would encourage
banks to lend, but some have used bailout funds to finance purchases of other
institutions instead.

Other critics of the bailout have said the bailout does not address the
housing market, which most economists point to as the root of the recent
economic downturn.

But Treasury Secretary Henry Paulson, along with Federal Reserve Chairman
Ben Bernanke defended the massive plan, saying the new liquidity initiatives
will take time to restore the markets to normalcy.