The government’s economic rescue plan continues to be hampered by an understaffed Treasury Department, the Wall Street Journal reports. With 40 employees, the Office of Financial Stability—which manages TARP—says it has about half the staff it needs, and banking regulators say there’s a big backlog of relief applications. Many decisions are being left to interim staff as the department struggles to find permanent hires.
These internal woes played a major role in Henry Paulson’s decision to abandon his plan to buy troubled assets from banks, observers say. “It’s very people-intensive,” said a top banking industry official. Treasury’s already stretched staff also has to prepare for the presidential transition. The head of the Office of Financial Stability says he expects to leave a lot of applications for the new administration to sift through.