The reduction of credit during the worst of the recession raises questions about whether the $247 billion assistance program achieved one of its primary goals: to stimulate the economy by reviving the flow of credit to businesses and individuals.

USA TODAY and the American University Investigative Reporting Workshop used federal bank data to conduct the first comprehensive analysis comparing the behavior of 940 banks in the Troubled Asset Relief Program (TARP) and 7,400 banks outside it. Key findings about TARP's first year:

• Lending fell. The amount of loans outstanding to businesses and individuals fell 9.1% for the 12 months ending Sept. 30, 2009, at banks that participated in TARP compared with a 6.2% drop at banks that didn't.

• Employee pay rose. Average pay at banks getting aid rose 9.4% in the program's first year. By contrast, non-TARP banks increased salaries 1.8%.

• Cost-cutting limited. Banks in TARP cut costs less than those outside the program. Government-aided banks increased branches by 2.7% while non-TARP banks cut branches by 1.2%.

The differences narrowed in the last three months of 2009 as many banks repaid the government.

President Bush signed TARP into law on Oct. 3, 2008, at the peak of the financial crisis. The program sought to stabilize the financial system and restore the flow of credit. Banks have repaid about $181 billion, including interest and dividends.

Rep. Jeb Hensarling, R-Texas, says the analysis shows that TARP "has been highly ineffective."

The Treasury Department, which runs TARP, says the program succeeded. Treasury spokeswoman Meg Reilly says "overall lending is improving as a result of the government's actions."

Contributing: Wendell Cochran, senior editor of the Investigative Reporting Workshop at American University in Washington, D.C., analyzed federal bank data for this report.

Source: http://www.usatoday.com/money/industries/banking/2010-04-21-tarp-banks_N.htm?csp=hf

The American Small Business League plans a series of lawsuits aimed at prying loose information about large corporations that are receiving small business contracts.

“A lot of this information is being withheld by the government when it should be public record,” said Chris Gunn, a spokesman for the League.

The first lawsuit, filed in U.S. District Court in Northern California, seeks to require GSA to continue reporting the names of contractors receiving set-aside contracts. The League says GSA plans to drop that information from the Federal Procurement Data System, deleting 10 years of data and making it impossible to track violations.

A judge is scheduled to rule by the end of the month on ASBL’s request for a preliminary injunction.

The second action, also filed in Northern California, asks that SBA be required to release details of its public relations contracts. The League believes the contract documents will show that “SBA has spent American tax dollars to hire consultants to help them obscure the SBA’s role in diverting billions of dollars a month in federal small business contracts to Fortune 500 firms and other large businesses around the world.”

Gunn said approximately 10 other suits are in the works, seeking information about such things as prime contractors’ performance in meeting subcontracting goals and the names of contractors doing classified work.

The Small Business League’s president, Lloyd Chapman, has charged for years that large corporations were masquerading as small ones to qualify for set-aside contracts. Several federal investigations have found that many contracts intended for small businesses had gone to large companies, but SBA has blamed the discrepancies on data-entry errors or the acquisition of small contractors by large ones.

Gunn said the League believes the lawsuits could yield information documenting “the government’s efforts to cover those abuses up.”

WASHINGTON (AP) -- America's "Great Compromiser" Henry Clay called government "the great trust," but most Americans today have little faith in Washington's ability to deal with the nation's problems.

Public confidence in government is at one of the lowest points in a half century, according to a survey from the Pew Research Center. Nearly 8 in 10 Americans say they don't trust the federal government and have little faith it can solve America's ills, the survey found.

The findings illustrate the ominous situation President Barack Obama and the Democratic Party face as they struggle to maintain their comfortable congressional majorities in this fall's elections. Midterm prospects are typically tough for the party in power. Add a toxic environment like this and lots of incumbent Democrats could be out of work.

Released Sunday, the survey found that just 22 percent of those questioned say they can trust Washington almost always or most of the time and just 19 percent say they are basically content with it. Nearly half say the government negatively affects their daily lives, a sentiment that's grown over the past dozen years.

This anti-government feeling has driven the tea party movement, reflected in fierce protests this past week.

"The government's been lying to people for years. Politicians make promises to get elected, and when they get elected, they don't follow through," says Cindy Wanto, 57, a registered Democrat from Nemacolin, Pa., who joined several thousand for a rally in Washington on April 15 - the tax filing deadline. "There's too much government in my business. It was a problem before Obama, but he's certainly not helping fix it."

Majorities in the survey call Washington too big and too powerful, and say it's interfering too much in state and local matters. The public is split over whether the government should be responsible for dealing with critical problems or scaled back to reduce its power, presumably in favor of personal responsibility.

About half say they want a smaller government with fewer services, compared with roughly 40 percent who want a bigger government providing more. The public was evenly divided on those questions long before Obama was elected. Still, a majority supported the Obama administration exerting greater control over the economy during the recession.

Only twice since the 1950s has public skepticism dipped this deeply - from 1992 to 1995 during which time it hit 17 percent, and 1978 to 1980, bottoming out at 25 percent. The nation was going through economic struggles during both of those periods.

"Trust in government rarely gets this low," said Andrew Kohut, director of the nonpartisan center that conducted the survey. "Some of it's backlash against Obama. But there are a lot of other things going on."

And, he added: "Politics has poisoned the well."

The survey found that Obama's policies were partly to blame for a rise in distrustful, anti-government views. In his first year in office, the president orchestrated a government takeover of Detroit automakers, secured a $787 billion stimulus package and pushed to overhaul the health care system.

But the poll also identified a combination of factors that contributed to the electorate's hostility: the recession that Obama inherited from President George W. Bush; a dispirited public; and anger with Congress and politicians of all political leanings.

"I want an honest government. This isn't an honest government. It hasn't been for some time," said self-described independent David Willms, 54, of Sarasota, Fla. He faulted the White House and Congress under both parties.

The poll was based on four surveys done from March 11 to April 11 on landline and cell phones. The largest survey, of 2,500 adults, has a margin of sampling error of 2.5 percentage points; the others, of about 1,000 adults each, has a margin of sampling error of 4 percentage points.

In the short term, the deepening distrust is politically troubling for Obama and Democrats. Analysts say out-of-power Republicans could well benefit from the bitterness toward Washington come November, even though voters blame them, too, for partisan gridlock that hinders progress.

In a democracy built on the notion that citizens have a voice and a right to exercise it, the long-term consequences could prove to be simply unhealthy - or truly debilitating. Distrust could lead people to refuse to vote or get involved in their own communities. Apathy could set in, or worse - violence.

Democrats and Republicans both accept responsibility and fault the other party for the electorate's lack of confidence.

"This should be a wake-up call. Both sides are guilty," said Sen. Claire McCaskill, D-Mo. She pointed to "nonsense" that goes on during campaigns that leads to "promises made but not promises kept." Still, she added: "Distrust of government is an all-American activity. It's something we do as Americans and there's nothing wrong with it."

Sen. Scott Brown, a Republican who won a long-held Democratic Senate seat in Massachusetts in January by seizing on public antagonism toward Washington, said: "It's clear Washington is broken. There's too much partisan bickering to be able to solve the problems people want us to solve."

And, he added: "It's going to be reflected in the elections this fall."

But Matthew Dowd, a top strategist on Bush's re-election campaign who now shuns the GOP label, says both Republicans and Democrats are missing the mark.

"What the country wants is a community solution to the problems but not necessarily a federal government solution," Dowd said. Democrats are emphasizing the federal government, while Republicans are saying it's about the individual; neither is emphasizing the right combination to satisfy Americans, he said.

The bill passed the committee with only a single dissenting vote.

S.B.1215, the Pre qualified List for A & E and other professional service firms, in State and Federal contracting, would stop the award of billions of dollars yearly in small business contracts to the same firms or classified large firms and other corporate giants.  This is a problem the American Small Business League (ASBL) has estimated is currently costing America’s small and minority business more than $100 billion annually. Report 5-15 from the Small Business Administration Office of Inspector General described this problem as, “one of the most important challenges facing the Small Business Administration and the entire Federal government today.”

S.B. 1215 has to do with establishing a “Pre qualified list” for architectural, landscape architectural, engineering, environmental, land surveying and construction management firms that possess the qualifications established by Caltrans or other State agencies, with the firms ranked in order of qualifications. Interested firm would submit statement of qualifications for general scope of work within each generic professional service category. The list would be maintained for two or three years.

As specific project services are identified, the Dept. or Agency will contact the firm on the top of the list for staffing, capability and availability. If that top firm does not fit, the Dept or Agency can continue to contact firms throughout the top five without approval.  The placement of the firms remains, but the awarded firm goes to the bottom of the list, allowing all qualified firms to receive project work.  Each professional service or A & E list would be established in three categories-$100,000 to $500,000, $500,000 to $5 million, over $5 million. A firm could only be in one category of a specific service. Thirty-two states have pre qualified lists.

Currently S.B. 1215 is in the California Senate Transportation and Housing Committee and the Hearing on the bill will take place April 20 at 1:30 PM Room 4203 State Capital Building.  We need your help. Please send a letter of Support to Senator Curran Price, State Capital Room 2052 Sacramento CA 95814 or electronically to Tiffani.Alvidrez@sen.ca.gov

Source: http://nationalblackbusinessmonth2009.wordpress.com/2010/04/19/california-senate-hearing-april-20-on-pre-qualification-bill/