Treasury reveals details of toxic-asset purchase program

Administration officials say they want to get the new program launched and see how successful it is before deciding whether to ask Congress for more money.

The administration included a placeholder in its budget request to Congress last month for an additional $750 billion, more than doubling the financial rescue effort, but many lawmakers have said the current bailout fatigue among voters dims the prospect of getting further resources.

First Trust Advisors chief economist Brian Wesbury said markets have been rising the past few weeks partly on expectations of a government plan to remove the bad assets from banks.

"If their proposal is seen as weak or inefficient or unworkable, then we could lose what we've gained pretty quickly," he says.

Under part of the program, investors will borrow government funds that they will supplement with their own money. The investors will then buy the toxic assets, which include loans and securities, many tied to subprime mortgages, for which there currently is no market and which are clogging banks' balance sheets and restricting lending.

Investors will compete for the government loans in auctions, which will set the interest rate for the loans.

Geithner's announcement comes amid public furor that firms such as AIG that have received taxpayer money have been paying bonuses. A movement is underway in Congress to tax bonuses given by firms receiving government aid.

"People want to participate if there's a business reason," White House economic adviser Austan Goolsbee said on CBS's Face the Nation. Firms in the program will "be treated totally differently than … AIG or Fannie Mae, where they are only in business because the government saved them."

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