Geithner Extends TARP Until October, Eyes Other Uses

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Political Update: Geithner Notifies Congress He’s Extending TARP

U.S. Treasury Secretary Geithner has notified Congress of TARP (Troubled Asset Relief Program) extension until October 2010

Use of the TARP probram was scheduled to expire at the end of this year. However, the law allowed Geithner to extend the program by simply notifying Congress before the program expired.

Geithner says he doesn’t expect to use more than $550 billion of the $700 billion authorized by Congress.

CNBC reports that the Obama administration will dedicate $175 billion to deficit reduction.

The program has $140 billion in uncommitted funds, which can be used in any way Congress sees fit. The assumption at this stage is the money will be used to fund a new Jobs program.

Recall that the original purpose of the TARP was to help avert a banking meltdown by allowing the Treasury to purchase ‘troubled assets’ in order to unfreeze the credit markets and provide banks the capital they needed to remain technically solvent.

Geithner is expected to testify regarding TARP in front of the Congressional Oversight Panel tomorrow at 10 am eastern.

 

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