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Report Questions How $700B Bailout Is Being Spent

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Dec 10, 2008 9:47 am US/Eastern

Report Questions How $700B Bailout Is Being Spent

 Timeline: U.S. Credit Crunch & Financial Failures

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WASHINGTON (AP) ― With a skeptical tone, a congressional panel reviewing the government's $700 billion rescue package for the financial sector is questioning the Bush administration's spending of bailout funds and challenging its reluctance to use the money to reduce foreclosures.

In a report to be made public later Wednesday, the oversight committee spelled out 10 pointed queries to the Treasury Department and questioned whether its shifting remedies constitute a strategic response to the financial crisis. The review represents the latest critical assessments of the Troubled Asset Relief Program, the massive federal intervention into the nation's financial system.

The 37-page draft offers no specific conclusions, but the questions suggest sharp disagreements with Treasury Secretary Henry Paulson's stewardship of the program and echo some of the criticism raised in a Government Accountability Office audit of the program last week.

"The American people need to understand Treasury's conception of the problems in the economy and its comprehensive strategy to address those problems," the draft report said.

The panel's chairwoman, Elizabeth Warren, a Harvard Law School professor and a Democratic appointee to the oversight group, is scheduled to testify about the panel's report Wednesday before the House Financial Services Committee, chaired by Rep. Barney Frank, D-Mass.

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