TARP REDUX

A Bailout for Main Street?

The White House is eyeing the possibility of using bailout money for loans to small businesses in the hopes that they will hire and lower unemployment. The proposal, the details of which are still up in the air, would create a new entity under the Troubled Asset Relief Program aimed at allowing banks to access TARP funds without restrictions, so long as that money was used for small-business loans. The administration hopes that not only would the loans allow small businesses to hire more workers and combat rising unemployment, but also ease criticism that the TARP bailouts helped big Wall Street firms at the expense of small business. Arguing for the easing of restrictions on TARP money, Treasury Secretary Tim Geithner told a congressional oversight panel that banks are afraid that "they will be stigmatized" if they "do business with the government."