Wednesday, February 11, 2009

Market Pans Economic Stimulus

The Wall Street Journal - WASHINGTON -- Treasury Secretary Timothy Geithner promised forceful action to get credit flowing again in the economy, but the lack of detail in his much-anticipated speech helped drive stocks down nearly 5%, the worst selloff since President Barack Obama assumed office.

Announcing the Obama administration's financial-rescue plan in the Treasury's ornate Cash Room, Mr. Geithner described a mix of efforts that were mostly already known in their outlines. They included a fresh round of capital injections into banks, an expansion of a Federal Reserve lending program and a public-private effort to relieve banks of soured assets. The steps are aimed at getting $1 trillion to $2 trillion in financing flowing through the economy to kick-start both consumer and business lending.

The other prong of the administration's economic program advanced Tuesday as the Senate passed a $838 billion stimulus bill, setting up a conference with the House to reach a final bill, possibly by the end of this week.

Mr. Geithner committed the government to spending $50 billion to stem home foreclosures but said the details remain to be worked out in the next few weeks. Officials also will take the coming weeks to flesh out details, in consultation with the public, of a planned Public-Private Investment Fund to take soured assets off banks' books.

After his speech, Mr. Geithner met with lawmakers. The Treasury could find itself back on Capitol Hill at some point seeking more financial-rescue funds. Officials said they have enough for the time being, but didn't rule out asking for more.

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