A new report by the investigative website Pro Publica has revealed that Congress diverted $30 billion in bailout money allocated to help struggling homeowners prevent foreclosure in order to pay down the national debt instead.
There were more than 1 million foreclosure filings in the first half of 2011 alone, yet only a fraction of the government aid that was supposed to reach homeowners has been spent:
Instead, Congress has mandated that the leftover money be used to pay down the debt.
Of the $45.6 billion in Trouble Asset Relief Program funds meant to aid homeowners, the most recent numbers available show that only about $2 billion has actually gone out the door.
The low number reflects how little the government’s home loan modification and other programs have actually helped homeowners deal with the foreclosure crisis.
Pro Publica notes that in November, the CBO lowered their estimate of the total amount of money the government would spend on its foreclosure relief programs from $22 billion to $12 billion.
The original TARP legislation stipulated that unused bailout money should be returned to the Treasury to reduce the debt. However, Congress has the power to “re-route” these funds so that they fulfill their original purpose of helping homeowners through loan modification programs and other plans. But it’s unthinkable that Republicans will take such action, even to help struggling families stay in their homes.
GOP lawmakers have consistently prioritized reducing the deficit over the more pressing concerns of chronically high unemployment and foreclosure. Their willingness to let billions that could be used to aid homeowners go to paying down the debt instead is perhaps the clearest illustration to date of their skewed priorities.