Exact matches only
Search in title
Search in content
Search in comments
Search in excerpt
Filter by Custom Post Type
Content from
{ "homeurl": "", "resultstype": "vertical", "resultsposition": "hover", "itemscount": 4, "imagewidth": 70, "imageheight": 70, "resultitemheight": "auto", "showauthor": 0, "showdate": 1, "showdescription": 1, "charcount": 3, "noresultstext": "No results!", "didyoumeantext": "Did you mean:", "defaultImage": "", "highlight": 0, "highlightwholewords": 1, "openToBlank": 1, "scrollToResults": 0, "resultareaclickable": 1, "autocomplete": { "enabled": 1, "googleOnly": 1, "lang": "en", "mobile": 1 }, "triggerontype": 1, "triggeronclick": 1, "triggeronreturn": 1, "triggerOnFacetChange": 1, "trigger": { "delay": 300, "autocomplete_delay": 310 }, "overridewpdefault": 0, "override_method": "post", "redirectonclick": 0, "redirectClickTo": "results_page", "redirect_on_enter": 0, "redirectEnterTo": "results_page", "redirect_url": "?s={phrase}", "settingsimagepos": "left", "settingsVisible": 0, "hresulthidedesc": "0", "prescontainerheight": "400px", "pshowsubtitle": "0", "pshowdesc": "1", "closeOnDocClick": 1, "iifNoImage": "description", "iiRows": 2, "iiGutter": 5, "iitemsWidth": 200, "iitemsHeight": 200, "iishowOverlay": 1, "iiblurOverlay": 1, "iihideContent": 1, "loaderLocation": "auto", "analytics": 0, "analyticsString": "", "show_more": { "url": "?s={phrase}", "action": "ajax" }, "mobile": { "trigger_on_type": 1, "trigger_on_click": 1, "hide_keyboard": 0 }, "compact": { "enabled": 1, "width": "300px", "closeOnMagnifier": 1, "closeOnDocument": 0, "position": "fixed", "overlay": 0 }, "animations": { "pc": { "settings": { "anim" : "fadedrop", "dur" : 300 }, "results" : { "anim" : "fadedrop", "dur" : 300 }, "items" : "fadeInDown" }, "mob": { "settings": { "anim" : "fadedrop", "dur" : 300 }, "results" : { "anim" : "fadedrop", "dur" : 300 }, "items" : "voidanim" } }, "autop": { "state": "disabled", "phrase": "", "count": 100 } }
Share This Post Now!

RISMEDIA, April 23, 2009-(MCT)-The Obama administration has enough money left for its economic initiatives with $110 billion remaining in the federal financial rescue fund and $25 billion more coming this year as some banks return bailout money, Treasury Secretary Timothy F. Geithner said.

Geithner disclosed the new numbers as he defended the administration’s bailout efforts in the face of tough questioning from a special panel overseeing the $700 billion Troubled Asset Relief Program, or TARP. In his first appearance before the panel, Geithner said federal funding has helped stimulate consumer and business lending, but more work was needed to revive an economy mired in recession.

“The lessons of financial crises (are) that early action, forceful action, sustained action to repair financial systems, promote the flow of credit, is essential to limit the damage recessions cause and to make it possible to bring recovery about at the least cost to the taxpayer over time,” he said.

In his written testimony, Geithner said the vast majority of banks “have more capital than they need to be considered well-capitalized by their regulators,” a comment that helped boost the stock market a day after it had been shaken by huge loan losses reported Monday by Bank of America Corp. The Dow Jones industrials jumped 1.6%, and the Standard & Poor’s 500 index surged 2.3%, as each gauge erased almost half the decline it recorded Monday.

The TARP money has been used primarily to bolster the financial industry – both giants such as Bank of America and Citigroup Inc. and smaller banks – but also to try to steady the teetering U.S. auto industry, specifically Chrysler and General Motors Corp.

Geithner tried to blunt criticism of the bailouts by saying the government was doing its best to balance the protection of taxpayer money with prevention of a collapse of the financial system. “My basic obligation and our responsibility is to make sure that the system as a whole has the ability to provide the credit that recovery requires. And so we need to make a careful judgment about what policies are going to best promote that objective,” Geithner told the congressional oversight panel, which was created last fall to monitor the use of the $700 billion fund.

In a separate letter to panel Chairwoman Elizabeth Warren, a Harvard University law professor, Geithner said the fund had at least $109.6 billion remaining after a series of unprecedented investments in U.S. banks and other financial institutions through TARP.

With repayments, the administration expects to have $134.6 billion to use for additional rescue efforts throughout the rest of the year.

Noting that the administration plans to provide additional money to banks, as well as to GM and Chrysler, “we believe that even under the conservative estimate of available funds described here, we have the resources to move forward implementing all aspects of our financial stability plan,” Geithner wrote.

The administration has not said how much more money it would provide to GM as it aims to restructure by June 1 and to Chrysler as it seeks a government-brokered merger with Italian automaker Fiat by May 1. But a report from the office of the TARP special inspector general said GM would receive up to $5 billion and Chrysler up to $500 million in working capital.

In February, the White House said it might need an additional $750 billion in bailout money should economic conditions worsen. But administration officials have since stressed that they have no plans to ask Congress for more money.

Such a request would be a hard sell because many lawmakers from both parties have been upset about the way the program has been run, particularly with the large amounts of money injected into banks with no requirements that they lend it.

Critics received more ammunition from the inspector general’s 250-page report, which said it had opened 20 criminal investigations into fraud and other misuse of the money. So-called stress tests to assess the financial condition of the nation’s 19 largest banks might require the government to provide more money to some large banks if they can’t raise additional capital themselves.

Those funds could be offset by repayments by some financial institutions, such as Goldman Sachs, that want to get out of restrictions on executive compensation and other government conditions that come with the federal money.

During his congressional appearance, Geithner was questioned sharply about recent comments indicating that even if some of the largest recipients of bailout money wanted to return the money and had the funds to do so, government officials might not allow them. “If there are firms that wish to repay taxpayers their money … why wouldn’t you take the money back?” asked Rep. Jeb Hensarling, R-Texas, one of two lawmakers on the panel. Geithner said that “nothing would make me happier,” but that administration officials and banking regulators would need to weigh the potential effect on the economy.

“One thing to look at is whether the institutions themselves have enough capital to be able to lend.” he said. And is the overall financial system working well enough to start pulling back the extra cushion that the bailout money provides, he said.

“People are angry because they’re paying for programs that haven’t been fully explained and have no apparent benefit for their families or for the economy as a whole but that seem to leave enough cash in the system for lavish bonuses or golf outings,” Warren told Geithner. “None of this seems fair.” Another panel member, Damon Silvers, associate counsel for the AFL-CIO, questioned the taxpayer risk in the proposed public/private partnership to purchase bad mortgage loans and other toxic assets from financial institutions.

There seemed to be a “profound and inexplicable imbalance” between the risk that taxpayers were making in funding the purchases and the upside they could get from sale of the assets at a later date compared with the lower risk and greater upside for private investors, he said.

Geithner said the alternative would be for the government to take on all of the risk and to determine, in the absence of private investors, the fair market value for the assets.

“Now, they would get in return all the potential upside in this case,” Geithner said of taxpayers, “but that trade-off is a bad trade-off for the government, because the government is highly unlikely to be in a position to be able to get the valuation right.”

© 2009, Tribune Co.
Distributed by McClatchy-Tribune Information Services.