Treasury Secretary Timothy Geithner announced Wednesday that the administration will extend the government's financial bailout program until next fall.
In a letter to House and Senate leaders, Geithner said the extension is "necessary to assist American families and stabilize financial markets." Money from the $700 billion taxpayer-funded bailout program has helped rescue big Wall Street firms, auto companies and others. That's angered many Americans, who feel the government hasn't provided them with relief from high unemployment and rising home foreclosures.
Geithner said the Troubled Asset Relief Program that Congress passed in October 2008, 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 do."
The Treasury secretary said new commitments bankrolled by the bailout fund will be limited to three areas next year.
One focus is stepping up efforts to curb record-high home foreclosures, a move necessary to stabilize the housing market and support a lasting economic recovery.
Another will be providing capital to small banks, which play a crucial role in providing credit to small businesses - normally a leading engine of job creation. But small banks have been weighed down by problem commercial real estate loans, which has made them reluctant to lend and hurt the ability of small businesses to expand and hire.
In a third area, Geithner said the government may boost its commitment to a program aimed at sparking lending to consumers and small businesses. Run by Treasury and the Federal Reserve, the Term Asset-Backed Securities Loan Facility, or TALF, started in March.
Geithner said he didn't expect any new commitments to the TALF would result in additional costs to taxpayers.
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