In a committee hearing today on Capitol Hill, Treasury Secretary Timothy Geithner provided the strongest evidence yet that the Obama administration has no intention of relinquishing control over its $700 billion bailout slush fund at year's end. The lifespan of the Troubled Asset Relief Program (TARP) has just 29 days left unless the Treasury requests an extension. Given that Congress will probably want to spend the holidays at home and adjourn sometime in the next few weeks, the actual time Geithner has to request that extension is even shorter. What's he waiting for?
First, here's what Geithner said today, via Reuters:
"We are actually close to the point where I think we can wind down this program and stop making new commitments and put it out of existence."
And some more detail from Bloomberg:
"The president and I will be making suggestions to the Congress in the coming weeks about what to do with this program, how to end it safely."
Yes, presumably the coming three weeks, before the program will otherwise expire. I'm a little perplexed as to why the Obama administration has decided to wait until the last possible moment to request the program's renewal. There's little doubt that it would want to continue to have control over these funds in the event that other economic disturbances materialize in the coming months.
And they should maintain that control for the time being. Economic reports remain largely mixed. Until it's clear that the economy is firmly on the rebound and credit is flowing more freely, another shock could cause serious damage. As the financial markets remain fragile, this weapon should remain in the Treasury's arsenal.