As has been confirmed by the Treasury Secretary Timothy Geithner, the Obama Administration has plans of extending the $700 Billion bail-out for the financial sector, but a new limit to the spending in areas such as housing and small businesses would be imposed.
While asserting that the financial sector has managed to stabilize, Mr. Geithner, in letters to U. S. lawmakers, has shared that the Government needs to have more funds available till October next year. "It is imperative that we maintain this capacity to respond if financial conditions worsen and threaten our economy", he said.
Earlier, the Troubled Asset Relief Program was scheduled to end on December 31, but its extension has now been announced, and is being seen as a direct result of some Democrats looking to tap "some of the more than $200 billion remaining for other initiatives, such as those aimed at job creation". On Tuesday, President Obama announced that the White House would use an additional $50 Billion in TARP in order to help small businesses.
Republicans have, on their part, criticized the extension by stressing that the program should not turn into "a piggybank for other initiatives".
"The Obama administration just can't seem to let go of the $700 billion in 'walking-around money' taxpayers were forced to put on the line to bail out Wall Street last year", said Rep. Jeb Hensarling.