Hope and Fail

Geithner announces TARP extension … the day after Obama said he would wind it down

One day after President Obama told the Brookings Institution that he planned to “wind down” the Troubled Asset Relief Program, his Treasury secretary told Congress the administration plans to extend the program into next fall.

From the Associated Press:

In a letter to House and Senate leaders, Geithner said the extension is “necessary to assist American families and stabilize financial markets.”

… The Troubled Asset Relief Program that Congress passed during the height of the financial crisis in October 2008 was scheduled to expire at the end of the year. Geithner said it will be extended until Oct. 3, 2010. He has the authority to extend the TARP simply by notifying lawmakers.

“The recovery of our financial system remains incomplete,” Geithner told lawmakers. “And, near-term shocks to that system could undermine the economic recovery we have seen to date.”

That flies in the face of what the president said. Obama said he plans to use the “left over” TARP money for a new jobs program and that in order to be “prudent” TARP must end:

And given the challenges of accelerating the pace of hiring in the private sector, these targeted initiatives are right and they are needed. But with a fiscal crisis to match our economic crisis, we also must be prudent about how we fund it. So to help support these efforts, we are going to wind down the Troubled Asset Relief Program — or TARP — the fund created to stabilize the financial system so banks would lend again.

Again, we’re faced with the question: Which story is it? And what’s more, if the TARP money is still going to be used next year, how is the president going to pay for his new jobs push?

Save/Share: