NEW YORK (CNNMoney.com) -- The perception that a $700 billion bailout aided financial institutions more than consumers could make it harder to do something similar in another crisis, a government watchdog group said Thursday.
"The program is now widely perceived as bailing out Wall Street banks and domestic auto manufacturers while doing little for the 14.9 million workers who are unemployed, the 11 million homeowners who are underwater on their mortgages, or the countless other families struggling to make ends meet," the Congressional Oversight Panel said in its report.
The report said the Troubled Asset Relief Program (TARP), approved by Congress in 2008 at the height of the financial crisis, succeeded in stabilizing the financial system.
But it said the program's other goals, protecting the homes and savings of Americans, were not met. Since October 2008, more than 7 million people have received foreclosure notices, and home prices and stock values have dropped roughly 30% from their pre-crisis peaks, the report said. And hundreds of small banks have been shut down or liquidated, while larger banks have fared better.
Treasury spokesman Mark Paustenbach countered the criticisms, noting that one of the economists consulted for the report has stated that presidential policies have saved 8.5 million jobs.
"Small banks that have received TARP funds have increased lending more than comparably sized banks that did not receive TARP funds," he said. "Treasury helped to restart the asset-backed securitization markets that provide credit to consumers and small businesses."
The panel's chairwoman, Harvard University professor Elizabeth Warren, recused herself from the report last week, according to Damon Silvers, another member of that panel.
Warren was engaged in conversations with the White House about working at Treasury as a special adviser, according to a source familiar with the conversations.
Sources tell CNN that Warren will be named as an assistant to the president so that she can help shape the consumer financial protection agency that's part of the new Wall Street reform law.