Today, Treasury Secretary Timothy Geithner testified before the Congressional Oversight Panel which oversees Treasury’s actions in implementing the Troubled Asset Relief Program (TARP) as provided for under the Emergency Economic Stabilization Act (EESA). COP Chair Elizabeth Warren noted how important it was that the COP "hear directly" from Treasury Secretary Timothy Geithner about the status of the $700 billion Troubled Asset Relief Program, particularly in light of existing "taxpayer concern" about the use of taxpayer dollars for financial bailouts and the chances that financial institutions will "stumble again" in the future.

Secretary Geithner discussed the progress, related economic returns, and ultimate reduction in need of many of the programs the government has implemented over the past year, including the winding down of the FDIC's Temporary Liquidity Guarantee Program, the reductions in the total size of the government's capital investments in the banking system to $180 billion (estimating that banks will repay another $50 billion over the next 12 to 18 months), and reductions in usage in the Federal Reserve's Commercial Paper Funding Facility by 87 percent, the Asset-Backed Commercial Paper Money Market Fund Liquidity Facility by 99 percent, the Term Auction Facility by 57 percent, and the Federal Reserve's currency swaps program by 90 percent. Although Secretary Geithner stressed that there are "signs of growth" and that the government is moving from "crisis mode" to "repair" and reconstruction, he acknowledged that there remains "a long way to go before true recovery takes hold," especially given that commercial real estate "remains strained" and the existing high U.S. unemployment rate.

The authority for TARP expires December 31, 2009, however Secretary Geithner, upon submission of a written certification to Congress justifying, among other things, why the extension is necessary to stabilize financial markets, may extend TARP until October 2, 2010 (2 years from the date of enactment of EESA). Recently appointed COP member and former SEC Commissioner Paul Atkins queried whether Secretary Geithner intends to extend TARP upon its expiration, to which Secretary Geithner stated that "no decision" has been yet made, and that Treasury will look at a "broad set of measures" to ensure the existence of financial stability, specifically, "the capacity of the financial system to live on its own without the exceptional support" currently provided by under TARP.

This was Secretary Geithner's second TARP update presented to the COP.