Reid: $700 billion bailout not working

By J. Patrick Coolican

Tuesday, Dec. 16, 2008 | 12:24 p.m.

At a hearing this morning in Las Vegas, one of the cities hit hardest by foreclosures, Senate Majority Leader Harry Reid told a congressionally appointed oversight panel that the $700 billion Wall Street bailout program is not working.

The Troubled Asset Relief Program, or TARP, which was originally designed to buy up bad assets, has shifted into a plan to inject capital directly into banks, Reid said.

So far, $335 billion has been allocated. Of that, Reid said $225 billion has gone to banks that were healthy, Reid said.

Those banks, however, have contracted lending, just like troubled banks. Reid called on the board to ensure that healthy banks that have received TARP funds begin lending.

The Nevada senator also criticized the program for not using any money to help people facing foreclosure.

Reid spoke today at the first hearing before the independent TARP oversight board, which is meeting at the Boyd School of Law at UNLV.

Find additional coverage in Wednesday’s edition of the Las Vegas Sun.