Geithner crawls out from underneath his rock to testify to the Congressional Oversight Panel.

By Ian Katz
June 22 (Bloomberg) -- Treasury Secretary Timothy F. Geithner said credit availability is improving and companies are building up unprecedented cash reserves, signs that the U.S. economy may be poised for increased growth.

“Credit conditions overall, which dragged our economy into a deep recession in 2007, no longer pose an obstacle to growth,” Geithner said today in testimony to the Congressional Oversight Panel. Corporations are raising money in capital markets “and have built up record cash reserves, which will eventually be reinvested and fuel growth.”

Geithner defended the government’s management of the $700 billion Troubled Asset Relief Program, which he said “played a critical role” in loosening credit. The program, criticized by both Democratic and Republican lawmakers as favoring Wall Street over small businesses, will cost taxpayers $105 billion by Geithner’s latest estimate, down from an estimate of $341 billion in August.

Congress authorized TARP in October 2008 to prevent a collapse of the U.S. financial system. Companies including Goldman Sachs Group Inc. and Bank of America Corp. that took funds have since repaid the government.

Elizabeth Warren, the panel’s chairman, told Geithner at today’s hearing she is concerned that “many banks still haven’t digested the toxic mortgages on their balance sheets.” The challenges the firms face “are straining their ability to lend to the small businesses that might otherwise be driving an economic recovery and reducing unemployment.”

Geithner said the Treasury is “well on the way to winding down TARP,” and plans to sell the remainder of its stake in Citigroup Inc. by year end. Prospects for the government’s investments in the auto industry have improved, and Treasury plans to begin to recover its stake in General Motors Co. after the company has an initial public offering later this year or in 2011, he said.

Today’s hearing “should be a eulogy for TARP,” Geithner said.

Bailed-out insurer American International Group Inc. is “making progress in restructuring its operations, in order to repay taxpayers and reduce its risk to our economy,” Geithner said.

The bailouts “did what they were supposed to do,” he said.

Grandpa:
Geithner also stated that TARP investments have generated $24 billion in gains for taxpayers, and more than half of total disbursements under the program has been recovered, according to Geithner. Timmy, your choice of the word "investment" is most insulting as we the taxpayer were not afforded any choice with the BAILOUT (not investment).

Timmy estimated that TARP would end up costing taxpayers $105 billion. GM alone has a $45 billion outstanding balance.

Once again, you conveniently left out specifics on the estimated losses from AIG, GM, GMAC (now Ally Financial that received $16 billion), smaller banks that received TARP funds (including the 91 that missed their payments) as well as the BILLIONS of FDIC guarantees.