The Obama administration has asked the head of Treasury Secretary Henry Paulson's Troubled Asset Relief Program and its chief investment officer to stay on for a short, but indefinite, period of time, people familiar with the matter said.
Timothy Geithner, President-elect Barack Obama's pick for Treasury Secretary, has asked Neel Kashkari and James Lambright to remain with the Obama team for several weeks to assist with the transition, these people said.
The decision to keep two members of Treasury Secretary Henry Paulson's team, even for a short period, could rile lawmakers angry over Mr. Paulson's handling of the $700 billion bailout. The Obama administration is working to revamp the financial rescue and erase some of the stigma associated with the bailout.
The incoming administration is also looking to expand the program, including additional measures to help banks, small businesses and homeowners in danger of foreclosure.
But Mr. Geithner wants to ensure that there are no hiccups as his Treasury takes over a giant, complicated program that involves taxpayer dollars. Retaining key officials for a few weeks after a new administration comes in is somewhat common during transitions.
Mr. Kashkari, who heads Treasury's Office of Financial Stability, has been in charge of staffing TARP and helping to structure the government's investments. Mr. Lambright, TARP's chief investment officer, has been overseeing all the investments Treasury has made, as well as approving applications from banks that want capital.
The two men are expected to assist Mr. Geithner for a short period and Mr. Geithner is expected to pick his own people for both those posts.
TARP News
Mr. Kashkari, in a speech in Washington, noted that the Treasury still has roughly $75 billion to distribute to banks as part of its $250 billion capital-injection program. "This capital needs to get into the system before it can have the desired effect," he said.
According to House Financial Services Committee Chairman Barney Frank, the federal government should devote at least $50 billion of the remaining financial-rescue funds toward a plan to prevent foreclosures. Wrapping up a week of efforts by legislators and businesses to stake claims on the Troubled Asset Relief Program and the proposed stimulus package, Mr. Frank said he plans to lay out a series of restrictions on the remaining $350 billion in TARP in a bill the House could vote on as soon as next week.
Mr. Frank said his plan would prevent banks from using government money to buy healthy banks and impose tougher executive-compensation restrictions for new recipients of TARP funds. He is also proposing a permanent increase in the Federal Deposit Insurance Corp.'s insurance limit on deposit accounts to $250,000.
Mr. Frank offered several options for stemming foreclosures, including loan guarantees and other incentives to spur loan modifications. Mr. Frank said Democrats want to give Obama administration officials flexibility to craft their own program.
Meanwhile, Republicans in both the House and Senate are floating additional measures that they wish to be included in any stimulus package. These include temporary cancellation of the indebtness rules. This would allow individuals and companies that have debt forgiven to not pay income taxes on the forgiven debt. This was done in 2007 for individual homeowners, and Republicans are want to expand the program.
Source: The Wall Street Journal
Timothy Geithner, President-elect Barack Obama's pick for Treasury Secretary, has asked Neel Kashkari and James Lambright to remain with the Obama team for several weeks to assist with the transition, these people said.
The decision to keep two members of Treasury Secretary Henry Paulson's team, even for a short period, could rile lawmakers angry over Mr. Paulson's handling of the $700 billion bailout. The Obama administration is working to revamp the financial rescue and erase some of the stigma associated with the bailout.
The incoming administration is also looking to expand the program, including additional measures to help banks, small businesses and homeowners in danger of foreclosure.
But Mr. Geithner wants to ensure that there are no hiccups as his Treasury takes over a giant, complicated program that involves taxpayer dollars. Retaining key officials for a few weeks after a new administration comes in is somewhat common during transitions.
Mr. Kashkari, who heads Treasury's Office of Financial Stability, has been in charge of staffing TARP and helping to structure the government's investments. Mr. Lambright, TARP's chief investment officer, has been overseeing all the investments Treasury has made, as well as approving applications from banks that want capital.
The two men are expected to assist Mr. Geithner for a short period and Mr. Geithner is expected to pick his own people for both those posts.
TARP News
Mr. Kashkari, in a speech in Washington, noted that the Treasury still has roughly $75 billion to distribute to banks as part of its $250 billion capital-injection program. "This capital needs to get into the system before it can have the desired effect," he said.
According to House Financial Services Committee Chairman Barney Frank, the federal government should devote at least $50 billion of the remaining financial-rescue funds toward a plan to prevent foreclosures. Wrapping up a week of efforts by legislators and businesses to stake claims on the Troubled Asset Relief Program and the proposed stimulus package, Mr. Frank said he plans to lay out a series of restrictions on the remaining $350 billion in TARP in a bill the House could vote on as soon as next week.
Mr. Frank said his plan would prevent banks from using government money to buy healthy banks and impose tougher executive-compensation restrictions for new recipients of TARP funds. He is also proposing a permanent increase in the Federal Deposit Insurance Corp.'s insurance limit on deposit accounts to $250,000.
Mr. Frank offered several options for stemming foreclosures, including loan guarantees and other incentives to spur loan modifications. Mr. Frank said Democrats want to give Obama administration officials flexibility to craft their own program.
Meanwhile, Republicans in both the House and Senate are floating additional measures that they wish to be included in any stimulus package. These include temporary cancellation of the indebtness rules. This would allow individuals and companies that have debt forgiven to not pay income taxes on the forgiven debt. This was done in 2007 for individual homeowners, and Republicans are want to expand the program.
Source: The Wall Street Journal
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