Will Wall Street Funds Now Bail Out Main Street?

The $700 billion financial bailout has caused controversy and outrage from the moment it was enacted last fall, an attempt by the Bush administration to save the financial system from a collapse that could imperil the overall economy.

A year later, critics argue, the bailout has only helped Wall Street, not Main Street.

But the Obama administration Monday revealed that the program's 10-year cost to taxpayers would be $200 billion less than expected -- and now a chunk of the remaining funds could be used to help put Americans on Main Street back to work.

Video of President Obama talking about the economy.
null

"We've been very successful in bringing stability back to the financial system and that's going to create very substantial resources for the president and the Congress to devote to the immediate priorities to the country," Treasury Secretary Tim Geithner said in an interview with ABC News' Jake Tapper.

The administration's immediate priorities include job creation and continuing to stimulate economic growth, issues that the president will address in a speech on Tuesday.

Obama is expected to focus on three main areas: energy, small businesses and infrastructure. House Democrats are reportedly eying a $70 billion chunk of bailout money to use in any jobs growth effort.

VIDEO: ABCs Jake Tapper Reports on TARP Surplus
null

"Having gotten the financial crisis under control, having finally moved into a positive territory when it comes to economic growth, our biggest challenge now is making sure that job growth matches up with economic growth," the president told reporters today.

The administration is exploring whether some of the TARP money can be used to stimulate job growth

"The question is, are there selective approaches that are consistent with the original goals of TARP," the president said.

Video of Federal Reserve Chair Ben Bernanke on the economy.
null

One area the president may push in his speech on jobs Tuesday is using the money for loans for small and medium-sized businesses.

"They cannot get the loans they need to make capital adjustments that would allow them to expand employment," he said. "And so that's a particular area where we might be able to make a difference."

Creating Jobs or Paying Down Deficit a Higher Priority?

Republicans have argued that any money left in the Troubled Asset Relief Program should pay down the nation's soaring deficit, rather than being reallocated for another government rescue plan.

VIDEO: Jake Tapper reflects on President Obamas agenda.
null

The nation's budget shortfall hit a record $1.4 trillion during the 2009 fiscal year that ended Sept. 30.

"For this president or this Democratic Congress to proposing using TARP funds for anything other than deficit reduction is simply a violation of the law," said Rep. Mike Pence, R-Ind., chairman of the House Republican Conference. "I think the American people know you can't pay off debt with debt."

"TARP has served its purpose. TARP ought to be ended," former GOP presidential candidate Mitt Romney said Sunday on CNN's "State of the Union." "We've got hundreds of billions of dollars there that is being used as a slush fund by Secretary Geithner and the Obama administration. Stop the TARP recklessness at this point and get ourselves back to creating jobs by encouraging businesses to grow, expand their capital expenditures, and hire."

VIDEO: The Fox News host grades Obama on health care, jobs and Afghanistan strategy.
null

Page
  • 1
  • |
  • 2
  • |
  • 3
null
Join the Discussion
You are using an outdated version of Internet Explorer. Please click here to upgrade your browser in order to comment.
blog comments powered by Disqus
 
You Might Also Like...