Lawmakers railed against rising federal deficits as well as proposed tax increases at a House hearing Wednesday where Treasury Secretary Timothy Geithner defended President Obama's budget plan.
In Obama's proposal, the money would be taken by small banks, which in turn could loan to small business. The program would be separate from TARP and would be aimed at creating jobs.
On Friday, Obama is set to announce tax credits for employers, with the aim of encouraging businesses to hire. Congress would have to vote on the proposal.
Community bankers say they have plenty of money now, and there isn't the demand for loans. TARP is an unpopular program that some in Congress would like to kill.
Treasury Secretary Timothy Geithner says the government ‘made the best of a set of terrible choices’ in bailing out insurance giant AIG. But Democrats and Republicans alike hammered him for not demanding more from financial institutions.
President Obama Thursday proposed new limits on banks' size as well as their ability to take risks. The move is part of reform measures to avert a repeat of the practices that led to the financial crisis. The stock market fell in response to the news.
A vote to raise the national debt ceiling is always tough, because it casts the majority party as a reckless spender. But Congress must confront the issue, probably Jan. 20, upon lawmakers' return from recess. If the ceiling is not raised, the government will likely run out of funds in February.
The bankers should pay, Obama says. But some think the money would come out of shareholders’ pockets, and others say the big banks would pass it along to consumers and businesses.
To recoup taxpayer money used in the bailout of financial firms, Obama on Thursday outlined a fee that big banks would have to pay for 10 years or more.
President Obama has made a priority of tackling the US unemployment rate – now about 10 percent. But a new jobs program would add more to the soaring federal deficit.