Paulson Asks For Rest Of $700 Billion TARP Funds

WASHINGTON — Treasury Secretary Henry Paulson said Friday that Congress will need to release the last half of the $700 billion rescue fund because the first $350 billion has been committed.

Paulson said the use of the rescue fund to provide loans to the auto industry along with all the other rescue efforts for the financial system meant that the administration has now basically allocated the first half of the largest government bailout program in history.

He said he was confident that the Treasury Department, Federal Reserve and Federal Deposit Insurance Corp. had the resources to address a significant market event if one should occur before Congress approves the use of the second half of the rescue fund.

But it's important for Congress to release the second half of the rescue fund "to support financial market stability," Paulson said in a statement.

Paulson said he will be consulting with congressional leadership and President-elect Barack Obama's economic team to determine how to proceed.

Under terms of the $700 billion rescue fund that Congress approved on Oct. 3, when the administration determines the second $350 billion is needed it has to submit a report to Congress detailing how it plans to use those funds.

The money automatically will become available unless both houses of Congress pass legislation blocking the funds within 15 days of receiving the administration's report. The request is expected to generate significant debate on Capitol Hill with key Democrats vowing to block the release of more money unless the administration includes greater efforts to help homeowners threatened with foreclosure.

House Financial Services Committee Chairman Barney Frank, D-Mass., has said the administration must allocate some of the new money for borrowers facing foreclosure, and impose more conditions to make sure banks use their rescue funds to increase lending.

"They're not going to get the (money) unless they get very serious about the foreclosure modifications and showing us how we're going to get some lending out of the banks," Frank said earlier this month.

Treasury officials said Friday that no decision had been made on when the request for the second $350 billion will be sent to Congress. They said Paulson was consulting on the matter with congressional leaders and members of Obama's transition team.

In his statement, Paulson said the loans for Chrysler LLC and General Motors Corp. were being extended with the expectation that the two companies would move quickly to develop acceptable plans for long-term viability. The administration believed there was a need to help the two companies given the state of the economy, which is facing a severe financial crisis amid the longest recession in a quarter-century.

"This step will prevent significant disruption to our economy while putting the companies on a path to the significant restructuring necessary to achieve long-term viability," Paulson said. "At the same time, we are including loan provisions to protect the taxpayers to the maximum extent possible."

The initial $350 billion from the rescue fund includes $250 billion being used to buy stock in hundreds of banks as a way to bolster their balance sheets and get them to resume more normal lending. Critics have charged that not enough conditions have been imposed on those funds to make sure the banks use the money to increase lending.

Comments

[toothful]

all around the dull, weary Bush
the monkeys chase the weasel.
who knows where the money goes?
! /
POP::~ goes the EAGLE!
/ !

[research]

NO!

Put it into Obama's Stimulus package!

[netty5264]

Enjoy

http://urbanlegends.about.com/library/bl_paulson_nigerian_scam.htm

[iver]

No, Paulson, no more money for you or Bush's bailout team. Nada. Ziltch. Zip. Not now, not for the next 4 weeks until we get new leadership who are looking out for American citizens. And while you are at it, go get the money back that you gave to those banks and insurance companies. They won't tell us anything and it is our money. Just take it back.

[JayInDallas]

Where's the accountability? Paulson shouldn't get anything until and unless someone provides verifiable proof that this fiasco is doing some good. AIG gets paid and rewards itself. I would have had the IRS crawl up their backsides with microscopes and magnifying glasses. Prove that this has value for the American people!

[mssisyphus]

Paulsen's really got some nerve asking for the rest of the money after he flat out lied about the purpose (no big surprise there) of the first half.

Not one struggling homeowner has been helped and after the debacle of AIG and the greed of the larger banks, using the money to snatch up smaller struggling banks instead of helping the "little guy" he doesn't deserve control over one red cent more. Congress needs their head's examined if they release the second half.

My brother and his wife's small bank won't even consider helping them renegotiate their mortgage so they won't lose the home they have been paying on for over 20 years and my son with A-1 credit was told by our local car dealership that their normal bank has ceased lending on ALL car loans for the time being.

What's wrong with this picture?

[Olampean]

With less than 1 month until the Obama team takes the wheel, the Bushies just need to be satisfied that they've done more than enough damage. They should just take the remaining days to tidy up their desks and leave the building quietly and quickly. And, as much as they deserve it, they shouldn't let the door hit (kick) them in the ass. They will not be missed!

[solarian]

no you cannot have the rest of the money. I want to know who got the money and how they spent it

[SteveDenver]

There's a new Huff article that $200bn has just been released to hedge funds. We deserve names and a hearing, just like the car makers. And strings, lots of strings: no huge salaries and bonuses (or "retention incentives"), no perks, this is a loan and will be paid back by May. Every senior manager should have to sign on PERSONALLY and guarantee it. None of this money has gone for what Bush & Co. promised: what a surprise.

[leevntheus]

Surely SOMEONE on the web has the a d d r e s s e s of these W H O R E S.

[Softnsweet]

ROFLMAO

[leevntheus]

How shrewd. All this goes down between when they learn they lose the election and when the new power takes office. 1-2 TRIILION dollar tax cut at the beginning of his term, along with ENRON L O O T I N G , a w a r for his M I C, and now a trillion out to bankers who are going to hide in D U B A I with D I C K and Halliburton.

Every day we are numb with disbelief, yet everyday they take more and more, NOT ONE SINGLE OFFICIAL RISES UP TO STOP THE N I G H T M A R E!!!!!

What could possibly be the BIG SECRET that is so diffuse that so many of them know it yet NONE of the voting public is in on it?

Are they all taking a rocket ship to Mars right before the asteroid hits? Are they all retreating to D U B A I as the Earth DROWNS? What is it?

Because they are all acting as if we don't exist. As if we WON'T EXIST.

[LuckyBlessed]

Congressman Cummings put it best;
"Mr. Kashkari, in the neighborhood I grew up in, in the inner city of Baltimore, one of the things that you tried to do was make sure that you were not considered a chump," Cummings said. "And what 'chump' meant was that you didn't want people to see you as just somebody they could get over on."

I worked in the board rooms of Corporate America and the mortgage industry and I can say Corp America has been taking the American people as chumps for some time. Whether it's healthcare, energy, banking, CORPORATE WELFARE has been going on for some time via lobby blood money. Bush, Cheney and Paulson are just taking it to new heights.

My question is where are they going to go when they have raped this country of everything?

[AlwaysaLiberal]

Paulson is not going to get this money. I would be extremely surprised if he did.

[jotunloki]

No more money for banks. Paulson needs to drown himself.

[Softnsweet]

I agree! No more money for banks. They have enough! The man has got to be crazy. Leave it to the Obama administration to hand out more money. They have less then 30 days. Leave the money alone.

[solarian]

no paulson needs a noose around his neck the crook

[roybattyjunior]

So it's abundantly clear to me now:

The US economy = "free market" casino - and the house always wins.

We (the plebes) go home broke, with worthless trinkets to show for our good time blowing all our money in the casino.

On an unrelated sidenote: Paulson is the biggest raincoater creep I've ever seen...