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Congressional Oversight on the Economy

Congress has been investigating the economic crisis and conducting oversight to protect the taxpayers in the economic rescue package. Over the last six weeks, the House has held twenty hearings with five more scheduled this week.

OVERSIGHT OF ECONOMIC RESCUE PACKAGE AND NEED FOR ACTION ON HOUSING CRISIS

October 7: Speaker Pelosi wrote Secretary Paulson expressing concerns with the interim guidelines released by Treasury for the hiring of contractors, which did not adequately ensure that conflicts of interest would be averted.

October 14: The Financial Services Committee under Chairman Barney Frank held a briefing with the GAO on implementation of the oversight and conflict of interest requirements in the new economic rescue plan.

October 17: Speaker Pelosi sent a letter to Secretary Paulson urging him to send a clear signal to financial institutions about to receive $250 billion in capital infusions from the federal government that part of such capital should be used to relieve the credit crunch, as intended by Congress and the Administration.

October 22: The Judiciary Committee held a briefing on home foreclosures and bankruptcy in Boston, as news of a 70 percent increase in foreclosures broke.

October 29: Speaker Pelosi and Leader Reid sent a letter calling on Secretary Paulson to strengthen restrictions on golden parachutes for CEOs and top executives in the newly devised portion of the financial rescue that injects capital into banks.

October 29: Judiciary Committee Chairman Conyers and others sent a letter to DOJ and FBI raising concerns about delays or lack of federal effort to investigate and prosecute mortgage fraud.

November 12: At the Financial Services Committee hearing, members encouraged the financial industry to alter the terms of more mortgages to allow people to stay in their homes - focusing on mortgages that had been sold in packages to investors like pension funds, hedge funds and insurance companies.

November 14: At the Oversight Subcommittee on Domestic Policy hearing on the TARP program, Chairman Kucinich said that Treasury had 'abdicated its responsibility' to stem the tide of home foreclosures. Other lawmakers said Treasury is too focused on banks and not on consumers. 'This administration wants to privatize Wall Street's gains and socialize Wall Street's losses,' said Rep. Cummings.


ORIGINS AND IMPACT OF THE FINANCIAL CRISIS

October 6: At the Oversight and Government Reform Committee hearing on the regulatory mistakes and financial excesses that led to the bankruptcy filing by Lehman Brothers, it was found that just days before it collapsed as it was looking for a federal rescue, Lehman Brothers agreed to pay more than $23 million to three executives leaving
the securities firm.

October 7: At the Oversight and Government Reform Committee hearing on the regulatory mistakes and financial excesses that led to the government bailout of AIG, it was found that only days after receiving tens of billions of dollars in a government bailout, executives of AIG took part in a $440,000 company retreat.

October 7: At the Education and Labor Committee hearing on the financial crisis impact on Americans' retirement security, CBO director Orszag testified that $2 trillion in retirement savings have been lost.

October 15: The Agriculture Committee under Chairman Collin Peterson held a hearing on the financial markets and the growing use of unregulated swaps that contributed to the downfall of AIG and Bear Stearns.

October 22: At the Oversight and Government Reform Committee hearing on the role of the credit rating agencies in the financial excesses on Wall Street, it was revealed that executives at the leading credit-rating companies had privately acknowledged they had created 'a monster' with overly optimistic assessments of risky mortgage-backed securities, which helped fuel the financial meltdown.

October 22: The Education and Labor Committee held a field hearing in San Francisco on the impact of the financial crisis on retirement security. The federal agency that guarantees pensions has lost $2.1 billion on investments this year, raising serious concerns about the impact of the financial crisis on retirement security.

October 23: At the Oversight and Government Reform Committee hearing on federal regulation of financial markets, former Fed Chairman Alan Greenspan admitted that he 'made a mistake' in trusting that free markets could regulate themselves without government oversight.

November 13: At the Oversight and Government Reform Committee hearing on the role of hedge funds in the financial markets, hedge fund managers said they would support new rules requiring their industry, controlling nearly $2 trillion, to become more transparent.

ECONOMIC RECOVERY

October 13: House Democratic Leadership held a forum with leading economists to help Congress develop an economic revival plan to directly benefit Main Street by creating jobs and assisting struggling families.

October 20: At a Budget Committee hearing, Chairman Bernanke said that weakening economic conditions warrant a 'consideration of a fiscal package by the Congress at this juncture.'

October 24: At the Education and Labor Committee hearing on the nation's severe unemployment outlook and strategies for job creation, economists testified that rebuilding infrastructure would create jobs.

October 27: During a House Democratic Leadership conference call, leading economists urged Congress to pass an economic recovery package soon to create jobs and lessen the severity of an economic downturn.

October 28: At a Small Business Committee hearing, Rep. Velazquez released a report stating, 'While current circumstances may be different from those in the past, the blueprint for recovery remains the same. More jobs, and greater economic growth--that's the formula we need, and that's the formula small businesses can provide.'

October 29: At a Ways and Means Committee hearing, governors and experts testified that Congressional action is needed to stave off deep cuts in health care, education and public safety. 'States didn't cause this crisis and we shouldn't be left to deal with it alone,” said Gov. Patterson of New York.

October 29: At a Transportation and Infrastructure Committee hearing, experts testified that investing in rebuilding America would create good-paying jobs and make us more competitive. The Association of State Highway and Transportation Officials testified that over 3,000 highway projects could be under construction within 90 days.

October 30: At a Joint Economic Committee hearing, NYU economist Roubin testified 'This fiscal stimulus should be voted on and spent as soon as possible.' The JEC released a report showing the prospect for a consumer-led recovery is highly unlikely and making the case for an economic recovery and job creation package for Main Street.

November 8: Speaker Pelosi and Leader Reid sent a letter to Secretary Paulson calling on him to review the feasibility of using the authority given under the Emergency Economic Stabilization Act (EESA) to provide temporary assistance to the automobile industry during this financial crisis.

November 11: Speaker Pelosi called for immediate action by the Bush Administration and Congress on legislation to help protect 1 in 10 American jobs by providing low interest loans to the auto industry saying, “[the failure of one or more of the Detroit automakers] would have a devastating impact on our economy…It is essential for the domestic automobile manufacturing industry to re-emerge as a global, competitive leader in fuel efficiency and in new, path-breaking energy-efficient technologies that protect our environment.'

November 12: At the Energy and Commerce Subcommittee on Health hearing, experts testified that a boost in federal aid to states for health care programs could help kick-start the U.S. economy where consumer and business demand has fallen dramatically.

UPCOMING HEARINGS

November 18: The Financial Services Committee will hold an oversight hearing on the Troubled Asset Relief Program (TARP) program and related initiatives taken by the Federal Reserve Bank and the FDIC in response to the turmoil in domestic and global financial markets.

November 19: The Financial Services Committee will hold a legislative hearing on extending the Department of Treasury's Troubled Asset Relief Program (TARP) to help the financial stability of the American automobile industry.

November 19: The Veterans Affairs Committee will hold a hearing on the VA's strategies for implementing the New GI Bill, which will make Iraq and Afghanistan veterans' part of an American economic recovery with a full, four year college education.

November 20: The House Agriculture Committee will hold a hearing to review the role of credit derivatives in the U.S. economy.

November 20: The House Committee on Small Business will hold a hearing to review recent federal efforts to improve credit conditions for small businesses.

Tuesday, December 9: The Oversight and Government Reform Committee will hold a hearing on Fannie Mae and Freddie Mac to examine their financial collapse, their takeover by the federal government, and their role in the ongoing financial crisis.