This is the VOA Special English Economics Report.
Secretary Henry Paulson is making changes in the seven hundred billion dollar
rescue plan for the financial industry.
plan passed by Congress last month is called the Troubled Asset Relief Program,
or TARP. Secretary Paulson proposed to buy risky housing-related investments from
banks. But on Wednesday he announced that the Treasury Department has moved
away from the idea of buying troubled assets.
Instead, he says the best way to help financial
companies is to provide new capital, such as buying stock He said TARP and other measures have helped
to calm financial markets that were in danger of collapse. Now, he wants to use
money from the program to help restart the market for securities based on
Secretary Paulson says this market has basically come
to a halt. He says this is raising the cost and reducing the availability of
car loans, student loans and credit cards. Jobs are also affected. The government says unemployment
reached six and a half percent in October -- the highest in fourteen years.
the financial crisis deepens, more companies have turned to the government for
help, including American automakers. Their sales are at the lowest levels in more
than twenty years.
Congress approved twenty-five
billion dollars in loans to help them build more fuel-efficient vehicles. Now
some lawmakers also want to lend them twenty-five billion in financial rescue
money. Secretary Paulson has resisted that idea.
The bailout program started with half of the seven
hundred billion dollars. The Treasury has already used all but sixty billion. Congress has to agree to release the other
Banks and government programs have
helped some struggling homeowners reduce their monthly loan payments. But critics
say the government is doing more to help the financial industry than to solve
the housing crisis weakening the economy.
So far the biggest recipient of aid is the insurance company American
International Group. This week A.I.G. reported
another huge loss related to home loans, almost twenty-five billion dollars
between July and September. The government agreed to increase support for A.I.G.
to one hundred fifty billion dollars in loans and stock purchases.
weekend, leaders from the Group of Twenty countries meet in Washington on how
to reform the financial system.
And that's the VOA Special English Economics Report,
written by Mario Ritter and archived at voaspecialenglish.com. I'm Steve Ember.