WASHINGTON – Only $109.6 billion in resources remain in the government’s $700 billion financial rescue fund.
But Treasury Department officials said Tuesday they expect the fund will be boosted over the next year by about $25 billion as some institutions pay back money they have received. That would boost the total to $134.6 billion.
The accounting details were made by Treasury Secretary Timothy Geithner in a letter to Elizabeth Warren, the head of the Congressional Oversight Panel.
In the letter, Geithner said the Bush administration had committed $355.4 billion in resources before it left office. That total included $117 billion committed to insurance giant American International Group Inc., banking giants Citigroup Inc. and Bank of America Corp., and auto companies General Motors Corp. and Chrysler LLC.
Since the Obama administration has taken office, an additional $30 billion has been committed to AIG and $5 billion to auto suppliers, bringing the total for what the administration termed “exceptional assistance” to $152.4 billion.
Another $218 billion has been committed to banks to bolster their capital reserves. So far, that program has disbursed nearly $200 billion to more than 500 banks nationwide with more applications pending. Former Treasury Secretary Henry Paulson had once set a goal of having $250 billion disbursed to banks.
By Treasury’s accounting, another $20 billion has been committed to the initial joint effort with the Federal Reserve to boost lending to consumers and businesses under a Fed program known as the Term Asset-Backed Securities Loan Facility.
Congress authorized the bailout fund on Oct. 3 after the Bush administration said a sizable response was needed to deal with the worst financial crisis to hit the country in seven decades.
The Obama administration sent Congress a budget request earlier this year that included a “placeholder” to more than double the fund to $750 billion. However, lawmakers have told the administration there is no chance they will approve any proposal to boost the fund.
There has been a sizable political uproar over reports of millions of dollars in bonuses paid to executives at financial institutions getting bailout funds. There also is unhappiness that all the money has failed so far in its primary objective of getting banks to resume more normal lending to consumers and businesses.
Geithner’s letter said the projection that the fund now has $109.6 billion in uncommitted resources was conservative because it assumed full participation in several new programs. If participation falls below expectations, more resources will remain.
The $109.6 billion is how much the administration has available to provide additional resources to the auto companies and deal with any of the nation’s largest banks found to need more aid after “stress tests” are completed at the end of this month.
To make the rescue funds go farther, administration officials said Monday they were considering converting some of the loans provided banks under the $218 billion capital purchase program into purchases of common shares, which investors view as a stronger type of capital.