marketplace that is in dire need of certainty and a sense of direction.”
Rep. Carolyn Maloney (D-NY), vice chair of the joint economic committee, and Rep. Maxine Waters (D-CA), chairwoman of its Subcommittee on Housing and Community Opportunity chastised Paulson for funding mergers and acquisitions and not getting credit out into the communities.
“The fact that you ignored the direction that this Congress gave you amazes me,” said Waters, who said she had faith in Paulson’s ability to help out homeowners, but is now disappointed that he did not utilize his authority.
Bernanke also defended results of TARP. He cited the distribution of funds to nine banks, a move by the FDIC to extend insurance guarantees to certain transactions that TARP was working.
“These actions, together with similar measures in many other countries, appeared to stabilize the situation and to improve investor confidence in financial firms,” said Bernanke in his testimony. “Going forward, the ability of the Treasury to use the TARP to inject capital into financial institutions and to take other steps to stabilize the financial system–including any actions that might be needed to prevent the disorderly failure of a systemically important financial institution–will be critical for restoring confidence and promoting the return of credit markets to more normal functioning.
Paulson also told Congress that the administration remains firmly opposed to using any part of the financial bailout fund for a $25 billion rescue package for the Big Three automakers.
“There are other ways” to help battered automakers, Paulson said
Auto executives insist they need more emergency loans — on top of the $25 billion already approved — to avert a collapse of one or more of their companies before year’s end.