Treasury Secretary Asks Congress for Second Half of TARP

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With the U.S. government promising a total of $17.4 billion to General Motors and Chrysler, U.S. Treasury Secretary Henry Paulson has officially requested the second half of the $700 billion TARP funds from the U.S. Congress.

The move comes despite a wave of unpopularity for the outgoing Treasury Secretary on Capitol Hill, after Paulson used the funds to inject liquidity into the financial system rather than for the purchase of illiquid assets from the firms.

Paulson had previously said that he planned on leaving the remaining $250 billion TARP funds to his successor, Timothy Geithner, but with the White House promising $17.4 billion in funds to GM and Chrysler, the government needs another $4 billion to fulfill its obligations to the firms.

By Erik Kevin Franco and edited by Nancy Girgis
©CEP News Ltd. 2008