RTTNews - President Barack Obama's nominee to head the $700 billion Troubled Asset Relief Program, or TARP, told lawmakers Thursday that it is important to save some of the funds for potential emergencies.
Herb Allison, the former Fannie Mae Chief Executive, told members of the Senate Banking Committee that while conditions are improving, the economy has a ways to go before it is comfortably on the road to recovery.
His appearance was part of a confirmation hearing, as Allison is slated to replace Neel Kashkari, who was asked by Treasury Secretary Timothy Geithner to stay on until a replacement was found.
If confirmed, Allison would become point person for what has become an unpopular program. Allison said that while much of the funds have already been spent, it is important to leave a cushion.
It's important that we leave some headroom in this program because we're not yet out of this crisis, he said.
Allison is the former chairman of investment company TIAA-CREF and was president and chief operating officer of Merrill Lynch & Co. In September, he agreed to run Fannie Mae after the government took over the company and its sister firm, Freddie Mac.
We are not yet out of the woods with this economic crisis, we all have to be aware of that, he said. We have to be vigilant. We can't be complacent. We have to be willing to modify these programs, if necessary, going forward.
However, while some funds should be reserved, he also promoted the idea that once a sustainable recovery is underway, the TARP program should be resolved quickly.
This program is designed to deal with an extremely serious financial crisis. It was not set up to be a long-term program, Allison said.
He is expected to be confirmed. If so, he pledged to bring the same managerial discipline and drive for results to the important office I will occupy.
Every dollar must be wisely and carefully managed, and we must be constantly accountable to the public which has entrusted us with their money, he said.
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