Administration extends $700B bailout until Oct

Audit: Taxpayers lose big on AIG, auto bailouts as Administration extends $700 billion fund

AP Business Writers
(Editor: The Taxpayers lost money on these bail outs – what a surprise – NOT!)

WASHINGTON (AP) -- The Obama administration has extended the $700 billion financial bailout program until October, setting up a struggle between Democrats who favor using some of the leftover money to help generate jobs and Republicans who say it should be used to shrink soaring budget deficits.

The administration insists the bailout fund is still needed to prevent further turmoil in the banking system. In announcing the decision Wednesday, Treasury Secretary Timothy Geithner said extending the program also will help homeowners struggling to avoid losing homes to foreclosures and small businesses having trouble getting loans.

The decision came on the same day the administration acknowledged two key bailout programs lost a total of $61 billion. The bailout of insurance giant American International Group Inc. and the lifeline thrown to struggling automakers each cost more than $30 billion, according to Treasury data disclosed in a report from the Government Accountability Office.

The administration is now projecting the losses to the government from the bailout program will be around $141 billion -- $200 billion less than it estimated two months ago.
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