Though Tim Geithner didn’t get his chance to spend all $700 billion of allocated TARP funds, he might have a shot at doing so next year.
According to FT, officials in the Treasury don’t want to let the funds expire in case another disaster shows up in the near future:
FT: The [Obama] administration is expected to extend its ability to make Tarp investments until October next year – without having to return to Congress – in case of another unforeseen calamity that can be mitigated with government money.
If the administration were to give it up but then try to secure additional investment funds, it would face a potentially hostile Congress. Even extending it as authorised will face resistance.
Not everyone is so keen on the ideas, however:
“Clearly, I’m against it,” said Jeb Hensarling, a Republican member of the House financial services committee and of the congressional oversight panel that scrutinises Tarp.
Mr Hensarling called any suggestion of Tarp having a positive impact on the budget deficit “smoke and mirrors accounting” and said other ways for the Treasury to constrain the use of Tarp could only be “teeny tiny baby steps in the right direction”.
Another disaster could range from commercial real estate to a stock market bubble to CDS exposure to…well, the list goes on and on. Get your checkbooks out, taxpayers: it’s going to be a long haul.