Paulson To Leave New Administration $410 Billion In Dry Powder
It is nice of him. Very nice.
Henry Paulson intends to leave $410 billion of his bailout fund to be used by the new administration, unless some emergency arises over the next few weeks. He may write a note and drop it in his desk for the incoming Treasury Secretary, but that will be about all.
Paulson is giving those who will have to handle the extraordinary problems in the economy and business sector a head start. There will be no need for Obama’s people to head back to Congress for another installment while there is still dry powder in the keg.
According to The Wall Street Journal, “In an interview, Mr. Paulson said he’s thinking about how the remaining $410 billion could be best utilized, but that he doesn’t plan to tap it unless a need arises.”
Now that most banks that are likely to get bailout money in the short term have applied and many have received their funds, the balance of the capital may be available for the car industry and programs which provide mortgage relief for troubled homeowners.
By leaving money in the bank, Paulson has probably saved a month of debate by the new Congress before a vote which would create a new fund can be completed. A prolonged battle over the next bailout pool could have set the next set of plans back by weeks.
Douglas A. McIntyre