Geithner: We do not plan to ask for more bank bailout money

A financial collapse is "not going to happen" Geithner said

Treasury Secretary Timothy Geithner said the Obama administration doesn't plan to ask Congress for more funds to expand an existing $700 billion bank bailout program it launched in October.


"We do not plan to ask for more money and I think it's quite unlikely that we do," Geithner said on ABC's This Week program on Sunday. "People need to understand that we will do what is necessary to make sure that viable businesses, families that have been very conservative and prudent, have access to credit at reasonable terms."

In a wide ranging interview, which included a discussion about heath care, deficit reduction, executive compensation and job creation, Geithner said he was optimistic that the Treasury department won't seek to have Congress approve more funds beyond the existing bank bailout fund, known as the Troubled Asset Relief Fund.



TARP funds have been used to provide capital injections into banks, car manufacturers and servicers and insurance companies. So far, a group of 10 large financial, as well as a number of smaller banks, have paid back TARP funds, bringing the fund's assets to roughly $130 billion, up from $40 billion the Treasury had available in the program in April.

Geithner added that he doesn't know how much remaining TARP funds he expects large financial institutions to pay back, but he said he expects a "substantial amount" to be returned. Critics on Capitol Hill worry that large sums of TARP funds, such as $85 billion that went to the automotive sector and $2 billion extended to the troubled CIT Group Inc., will not be paid back.

Jobs

Geithner added that he expects to see the pace of job losses to continue to slow materially. "Again most private forecasters -- let's use their judgment -- suggest you're going to see unemployment start to come down maybe beginning in the second half of next year," Geithner said.

White House Economic Council Director Larry Summers said on Sunday's NBC "Meet the Press" that the economy is no longer in free fall despite the high unemployment. See full story.

However, Geithner did not say the administration will move to extend unemployment benefits, after reports that roughly 1.5 million people could be losing their unemployment benefits by the end of the year.

"I think that is something that the administration and Congress are going to look very carefully at as we get closer to the end of this year," Geithner said.

Deficit reduction

Geithner also declined to say whether the administration would consider new revenue generation ideas as a means of reducing the expanding deficit. The Congressional Budget Office estimates that the White House's budget would add $9 trillion to the national debt over the next 10 years.

"Well, we're going to have to look at - we're going to have to do what's necessary," Geithner said. "Remember the critical thing is people understand that when we have recovery established, led by the private sector, then we have to bring these deficits down very dramatically."