Business Digest: Treasury Says Nation's Recovery Is Just Starting
Treasury: Recovery Is Just Starting
The Obama administration on Thursday sent its clearest signal yet that it is prepared to extend its $700 billion bailout for Wall Street for another year, even as lawmakers said they were frustrated that not enough was being done to help the average American.
"We still have work to do," said Herbert Allison Jr., the senior Treasury official in charge of the bailout fund. In his testimony, Allison repeatedly deferred to Treasury Secretary Timothy F. Geithner on whether the administration would authorize an extension of the bailout program through next year as the law allows.
At the same time, Allison said further government intervention in the market may be necessary because of the decline in commercial real estate.
"In this context, it is prudent to maintain capacity to address new developments," Allison told the Senate banking committee. "By bolstering confidence, having such capacity may actually reduce the need to use it." Congress approved the rescue plan, known as the Troubled Assets Relief Program, with bipartisan support in October at the request of then-President George W. Bush during the height of the financial crisis.
-- Associated Press
Volcker Says Proposals May Not Stem Bailouts
Former Federal Reserve chairman Paul Volcker, a top White House economic adviser, said the Obama administration's proposed overhaul of financial rules preserves the policy of "too big to fail," and could lead to future bailouts.
Volcker, speaking to the House Financial Services Committee, said he does not differ with the administration on most of its proposals, and takes "as a given" that banks will be bailed out in times of crisis. But he opposes bailouts of insurance firms like American International Group, automakers' finance arms and others. "The safety net has been extended outside the banking system," Volcker said. "That's what I want to change."
-- Associated Press
Pentagon Releases Rules on Tanker Bids
The Pentagon has unveiled what it calls "crystal clear" rules in a $35-billion contest to build new refueling aircraft after two botched attempts, although some lawmakers said a trans-Atlantic trade dispute should have been accounted for.