What bothers me most about this bailout deal is that the Federal Reserve is NOT disclosing who gets the money. Is Paulson picking and choosing his favorites to get money? What’s up with that and how did congress agree to no disclosure?
Treasury Secretary Henry Paulson is scheduled to give an update today on the $700 billion bailout program for the U.S. financial system.
Critics are complaining that the administration is not being tough enough on the banks who are receiving the assistance, that the original centerpiece of the program — government purchases of troubled assets — has been left to languish and that homeowners struggling with mortgage foreclosures are not getting the help they need to stay in their homes.
President-elect Obama, when he met with President Bush at the White House on Monday, urged Bush to support aid for struggling automakers and Democrats in Congress have begun drafting legislation that would give General Motors, Ford and Chrysler access to $25 billion of the rescue funds.
The Bush administration has already committed $250 billion of the money for the purchase of bank stock, giving financial institutions an infusion of cash that the government hopes they will use to resume more normal lending operations and address the most severe credit crisis in decades. On Monday, the administration announced that it was allocating another $40 billion as an investment in troubled insurance giant American International Group.
Those decisions leave only $60 billion left to allocate of the first $350 billion in funds approved by Congress and that is before any money has been spent to buy troubled assets, which originally had been the administration’s chief reason for requesting the bailout program, which Congress approved on Oct. 3.
The government on Tuesday sought to address another of the complaints of critics, that not enough is being done to help Americans deal with record levels of mortgage defaults.