The American Spectator

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The Treasury Secretary Timothy Geithner's war against SIGTARP -- Neil Barofsky, special inspector general for the Trouble Assert Relief Program bailout -- continues escalating steadily. Barofsky's estimate that the total cost of TARP could reach more than $23 trillion (that's "trillion," with a "t") was criticized last week by Geithner's spokesman:

The Treasury Department disputed Mr. Barofsky's estimate as "inflated." Treasury spokesman Andrew Williams said Mr. Barofsky's estimate "does not take into account the assets that offset the risk in these programs" and also doesn't reflect "fees and other charges that compensate the U.S. taxpayer for the risks incurred."

Saturday, ABC's Jake Tapper published an interview with the man tasked with watchdogging the bailout cash, who defended his numbers:

"I think that the Treasury Department ought to read the report before they make comments, at least the spokesperson's office," Barofsky said. "Our methodology is laid out in black and white in the report. ... As far as the numbers being inflated, where do you think we got the numbers from? We got it from the Treasury Department, we got it from the Federal Reserve. ... If these numbers are inflated, it's because they inflated them when they put them out in the public, not because of us."
The inspector general defended the numbers outlined in his report, saying that all his team has done is to "gather the 50 programs, put them in one place, and told the American people what the government has said about the maximum of each of these programs."
"Perhaps their criticism is that we dare to do math," he said. He added that his team tried to convince the Treasury that they were wrong, and that recipients should be required to report on how they use the federal funds, and those should be shown to the American people so that they know it's "not being thrown into a black hole."

(Hat-tip: Hot Air; more blog reaction at Memeorandum.) There are important political factors involved in this battle over SIGTARP, which began when Iowa Sen. Chuck Grassley started asking questions about Treasury's attempt to withhold documents from Barofsky's investigators. As I noted earlier, Barofsky's testimony Tuesday before the House Oversight Committee unleashed a bipartisan firestorm about the lack of transparency:

"The taxpayers now have a $700 billion spending program that's being run under the philosophy of 'don't ask, don't tell,' " Rep. Edolphus Towns, (D-N.Y.) said during a hearing on the Troubled Assets Relief Program, or TARP.
Rep. Darrell Issa (R-Calif.) went as far as to compare the Treasury's refusal to provide regular updates on how TARP money is being spent to the way convicted Ponzi scheme mastermind Bernard L. Madoff misled his clients. . . .

The Wall Street bailout has been unpopular from its inception. Sen. John McCain's outspoken support of the bailout was the decisive factor in his landslide defeat in last fall's presidential election. Now, we see unemployment soaring (more than 15% in Michigan, near 12% in California) and consumer confidence falling, while the stock market surges upward. You can't blame people for suspecting that massive taxpayer-funded assistance to financial giants like AIG, Goldman Sachs and Bank of America might have something to do with this widening chasm between prosperity on Wall Street and misery on Main Street.

Saturday, after giving a speech at the "Liberty 101" event in Richmond, Virginia, I had a conversation with a local businesswoman who has owned a travel agency for 24 years. Like many other small business owners in this economy, she's fighting hard just to hang on.

Polls indicate a growing perception that the Obama administration is mismanaging the economy, with special favors for politically connected Wall Street fat cats at the expense of ordinary American taxpayers. When you talk face-to-face with the people like that travel agency owner -- people whose livelihoods are threatened with annihilation by the economic blundering of President Obama, Secretary Geithner and Federal Reserve Chairman Ben Bernanke -- you realize that poll numbers can't begin to capture the pain and anger many people are now feeling.

With another approaching crisis in banking and forecasts that unemployment will continue rising for months to come, Obama will eventually start looking for a scapegoat. Though once hailed as an economic savior, the nominee who was "too big to fail," Geithner is now odds-on favorite to win the Scapegoat Sweepstakes. SIGTARP Barofsky's watchdogging of the bailout "black hole" may be enough to push Geithner across the finish line.

NEIL BAROFSKY: DOCUMENT DUMP

• Copy of SIGTARP Quarterly Report (PDF)
• Text of Barofsky testimony to House Oversight Committee (PDF)
• Text of closing statement by Oversight Chairman Rep. Edolphus Towns (D-N.Y.)
• Press Release From Oversight Ranking Member Rep. Darrell Issa (R-Calif.)
• Text of Issa statement (PDF)
• Sen. Chuck Grassley Pressures Treasury on TARP (July 22)
• Grassley Press Release About SIGTARP (June 18)
• Grassley Letter (PDF) to Secretary Geithner (June 17)