House Democrats have put forth an $825 billion stimulus package in an ambitious plan aimed at stimulating the economy. But before spending any more money, Congress and newly inaugurated President Barack Obama should offer a detailed account of the vast sums of bailout dollars already doled out by the Bush administration over the last few months. Incredibly enough, no one really knows precisely how much Washington has already committed or handed out—let alone to whom and for what purposes.
In July 2007, Mr. Obama signed Reason Foundation's Oath of Presidential Transparency, pledging his commitment to "open, transparent, and accountable government principles."
"Every American has the right to know how the government spends their tax dollars, but for too long that information has been largely hidden from public view," said then Sen. Obama. "This historic law will lift the veil of secrecy in Washington and ensure that our government is transparent and accountable to the American people."
If his promise for transparency was important then, it is even more critical now in the wake of Uncle Sam's recent spending binge.
Mr. Obama should press for a complete, itemized—and publicly available—list of how much money taxpayers are already on the hook for to bailout failing entities. There are so many different bailout-related programs—TARP (Troubled Asset Relief Program), Federal Reserve programs, auto bailouts, and investment guarantees—that we don't have a firm dollar figure. No one knows exactly what to count. Different sources have given different estimates that vary by as much as $1 trillion or so. The New York Times, in December, calculated bailout spending to be $7.8 trillion. CNBC thinks it is about $7.3 trillion. If you count all the taxpayer money spent in 2008 on bailouts, including the $150 billion stimulus in the spring of 2008 and the early bank rescues, such as IndyMac, the figure rises to over $8.4 trillion.
During the campaign, Mr. Obama talked about "putting the government online" and he has already announced a website for stimulus spending—www.Recovery.gov.
"We plan to create a Web site that will contain information about the contracts and include PDFs or contracts themselves and also financial information about the contracts," Peter Orzag, Obama's choice to lead the Office of Management and Budget, encouragingly told The Washington Post.
Sen. Claire McCaskill (D-MO), one of Mr. Obama's most boisterous supporters, recently told Time magazine that taxpayers are demanding accountability. "I call it the grocery-store test: How many aisles can I get down the grocery store without someone yelling at me?" said McCaskill. "I couldn't even get to the produce section at the front of the store before people started screaming at me about the TARP. If we can't get transparency for taxpayers on this, it's going to be difficult to get my vote [on the stimulus package]."
But President Obama and Congress should not limit transparency to just the stimulus spending or even TARP—everything should be on the table.
The Treasury Department—in association with the Federal Reserve and FDIC—should create an "online checkbook" showing how many checks it has written, when they are cashed, and offer detailed notes about what they paid for. The government should also list who it has loaned money to, what has been paid back, and how much interest it has earned. Ultimately, the key is simplicity and clarity.
Neel Kashkari, interim assistant Treasury Secretary for financial stability and one of the people theoretically in charge of the bailout money, has told the House Financial Services Committee that he is directing his staff to establish a formal monitoring program to track TARP dollars. But with the Bush administration and Congress having failed to provide accountability for the bailout spending thus far, it will be up to the Obama administration to halt the government's policy of handing out taxpayer money first and asking questions later, if ever.
The lack of accountability thus far should be unacceptable to the taxpayers who have had trillions spent in their name. With talk that the upcoming stimulus package may grow beyond $825 billion, taxpayers now, more than ever, need President Obama to lead the charge for transparency and accountability.