By Robert Schmidt
Dec. 19 (Bloomberg) -- Treasury Secretary Henry Paulson urged Congress to release the second half of the $700 billion financial rescue fund after exhausting the first $350 billion in less than three months.
Congress, which passed the Troubled Asset Relief Program on Oct. 3, “will need to release the remainder of the TARP to support financial market stability,” Paulson said today in a statement released in Washington. “I will discuss that process with the congressional leadership and the President-elect’s transition team in the near future.”
The Treasury today agreed to lend $13.4 billion to General Motors Corp. and Chrysler LLC, after spending $335 billion mostly to increase bank capital. Lawmakers, who can vote against giving Paulson the remaining funds, have criticized the Bush administration for not using the rescue package to help homeowners facing foreclosure.
While the Treasury has allocated most of the first $350 billion, not all of it has been actually disbursed. Paulson said that he was confident that “in the very short-term” the government has enough money on hand to “address a significant financial market event.”
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