In the short term, the administration is focused on implementing the $700-billion rescue package, she said. As part of that, the Treasury Department on Monday began moving to inject $250 billion into U.S. banks. It will begin releasing the funds immediately, officials said.
"This is an investment, not an expenditure, and there is no reason to expect this program will cost taxpayers anything," Treasury Secretary Henry M. Paulson said.
About $125 billion has been pledged to nine of the nation's largest financial institutions. The remaining $125 billion is available for banks, savings and loans and other such companies. Candidates must fill out a two-page form, and their financial health must pass muster with federal regulators.
Treasury officials have insisted that the goal of the program is to aid healthy banks, not prop up weak ones. Federal regulators have said that weaker banks may qualify only in the context of a merger with a stronger institution or if they can attract additional capital from private sources at the same time.
Any pending mergers, acquisitions or other plans for raising capital must be disclosed as part of the application, officials said. The deadline to apply is Nov. 14.
"This program is designed to attract broad participation by healthy institutions and to do so in a way that attracts private capital to them as well," Paulson said. "Our purpose is to increase confidence in our banks and increase the confidence of our banks, so that they will deploy, not hoard, their capital."
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Staff writer Richard Simon contributed to this report.
jim.puzzanghera@latimes.com
maura.reynolds@latimes.com
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Where the money might go
Among the proposals expected to be considered for a new stimulus package that could cost $150 billion or more:
* Extension of unemployment benefits to those who have exhausted their benefits. Payments would be extended in all states but probably longer in those with high jobless rates.
* Spending for infrastructure such as highway and school construction projects.
* Aid to the states, including help with Medicaid costs.
* Increased food stamp benefits.
