Minutes after changing his mind on using TARP to save the carmakers (which may be illegal), Hank changes his mind again:
WSJ: Treasury Secretary Henry Paulson said Friday he wants Congress to release the second half of the $700 billion financial rescue package, setting up what is expected to be a bruising dialogue with lawmakers from both parties who have expressed frustration with the way he has navigated the financial crisis.
Mr. Paulson said the $17.4 billion Treasury committed to provide General Motors Corp. and Chrysler LLC means that the government has “effectively” allocated the first $350 billion that Congress authorised in early October for the Troubled Asset Relief Program to stabilise the financial markets. Mr. Paulson said he has “confidence” that “we have the necessary resources to address a significant financial market event.”
“It is clear, however, that Congress will need to release the remainder of the TARP to support financial market stability,” Mr. Paulson said. “I will discuss that process with the congressional leadership and the President-elect’s transition team in the near future.”
Mr. Paulson’s statement signals a shift from recent statements when he suggested he wouldn’t ask for the rest of the money. Lawmakers from both parties have blasted Treasury’s use of the first $350 billion, which has mostly gone to inject capital into healthy banks as well as troubled institutions such as Citigroup Inc. and American International Group Inc. Treasury originally sold lawmakers on the plan as a way to purchase troubled assets off from financial institutions.