Bailout

Distancing himself from Republicans on housing issues, President Obama pitched a $5-billion to $10-billion plan to help a key segment of struggling homeowners — those still making monthly payments, but on underwater mortgages. Obama proposed Wednesday to help about 3.5 million people with good credit who are unable to refinance at historically low rates because their homes are worth less than their mortgages. He argued that those homeowners — and the country — couldn't afford to let the housing market bottom out, as many Republicans, including presidential candidate Mitt Romney, have advocated.

Mariano Rajoy, Spain’s prime minister, has found a new ally in his quest for lower borrowing rates and liquidity in his recession-racked country: France’s new President Francoise Hollande. A week after his inauguration, Hollande met with Rajoy at the Elysee Palace to talk policy before heading to a European Union summit in Brussels later in the day.

LISBON - For Francisco Reposo, the 30% pay cut he was forced to take this year amid government austerity measures is the least of his worries. The high school science teacher is also on dialysis, awaiting a kidney operation, and Portugal's financial bailout means he's saddled with hundreds of dollars in monthly medical bills. The cost of seeing a doctor in Portugal has more than doubled, from about $12 to $26 a visit. Reposo used to pay nothing for dialysis because he's a blood donor, but that exemption was lifted, and he now pays about $53 for each session.

MARTINS FERRY, Ohio -- Joe Biden Thursday mocked Mitt Romney for attempting to claim credit for the rebound of the American auto industry, linking the GOP hopeful's past criticism of the Obama administration's rescue plan with his role as the head of venture capital firm Bain Capital. The setting for Biden's latest attack on Romney was a Chevrolet plant in the southeast corner of Ohio, to a crowd of 450 invited supporters standing before three Chevy Cruises. The vice president praised Obama for stepping up to save Big 3 automakers General Motors and Chrysler from "liquidation," to preserve what he called an "iconic industry that helped build the middle class.

As one of the most controversial chapters in U.S. economic history draws to a close, the Obama administration and its critics are writing very different obituaries of the $700-billion fund that bailed out Wall Street and the domestic auto industry. Treasury Secretary Timothy F. Geithner said the much-maligned Troubled Asset Relief Program "succeeded in ways that none of us could have imagined. " And Herbert M. Allison Jr., who resigned Wednesday as TARP's head, said the fund laid the foundation for the nation's recovery — "at a fraction of the cost that was originally anticipated.

Detroit native Mitt Romney has long contended that the U.S. automobile industry would be better off had the federal government not bailed out General Motors and Chrysler. In particular, he argued in 2008 and again in February (while campaigning in Michigan's Republican primary) that the companies should have restructured themselves without the feds' involvement through a "managed bankruptcy" process. But that ignores a crucial fact: Companies that are broke require money to keep operating, even while under the protection of a Bankruptcy Court.

On the same day that General Motors reported record profits, Mitt Romney stumped in Michigan, reiterating his opposition to the federal government bailout that many credit with saving GM and Chrysler. Romney told the Detroit News' editorial board Thursday that rather than the federal government lending the two companies $80 billion, GM and Chrysler should have entered bankruptcy six months earlier and the federal government should have offered loan guarantees. "I would have never allowed the auto industry to disappear," Romney told the paper.

The 17 nations of the Eurozone agreed Friday to increase their bailout resources in an attempt to keep a lid on the debt crisis that has hobbled the region's economy and raised doubt about the future of the euro. But the new total of about $1 trillion in rescue funds still falls short of what many analysts and investors have suggested is necessary to insure major economies such as Spain and Italy against a possible default. Also, more than a third of the money is already committed to rescue packages for Greece, Ireland and Portugal, meaning that the actual amount available is considerably less.

Re "America's muscle: Detroit steel," Opinion, Nov. 23 Every time the bill comes to renew my subscription to The Times, I wonder if this is the time to cancel -- then I come across an article such as Ellen Slezak's, and I renew. The story she tells reminds us of the importance of the auto industry to families across America and the decent future for them that the bailout will help ensure. I support the bailout, although I feel it must come with new ideas. For example, the bailout should subsidize buying up American-made SUVs and replacing them with high-gas-mileage, low-pollution station wagons -- possibly hybrids.

Re "U.S. rescues giant Citigroup," Nov. 24 Your article underscores the need for the federal government to tighten the strings on each bailout it proposes and hold all executives accountable for their bad decisions. Citigroup's collapse was caused by the big boys who speculated with risky but potentially profitable maneuvers. As a condition for the company to continue on, these sharpies need to go -- just as the dunderheads in the auto industry must also be purged. The new Obama administration must ensure that the hundreds of billions of dollars of taxpayer risk are not squandered further by greedy and incompetent management.

LISBON - For Francisco Reposo, the 30% pay cut he was forced to take this year amid government austerity measures is the least of his worries. The high school science teacher is also on dialysis, awaiting a kidney operation, and Portugal's financial bailout means he's saddled with hundreds of dollars in monthly medical bills. The cost of seeing a doctor in Portugal has more than doubled, from about $12 to $26 a visit. Reposo used to pay nothing for dialysis because he's a blood donor, but that exemption was lifted, and he now pays about $53 for each session.

LANSING, Mich. - Mitt Romney is making a play for his native Michigan, which last voted for a Republican for president nearly a quarter of a century ago. His task is made infinitely more difficult because of his opposition to the auto bailouts that many credit with saving the industry, a fact that was illustrated when he took the stage here Tuesday, not far from a GM plant. As protesters outside the Lansing Community College auditorium where he appeared criticized Romney's opposition to the bailouts, the presumptive GOP nominee was introduced by Michigan Gov. Rick Snyder, a Republican who has called the $80-billion federal loans to GM and Chrysler successful.

WASHINGTON - The U.S. government could end up pocketing a $15.1-billion profit from the bailout of insurance giant American International Group Inc., according to a new estimate by the Government Accountability Office. The report came as the Treasury Department this week continued to wind down its stake in AIG, which the government rescued from collapse in late 2008 with a multi-step infusion of $125 billion in taxpayer money to stabilize the company. The Treasury Department said this week that it agreed to sell $5.75 billion worth of shares to reduce the government's ownership stake to 61% from 70%. The sale, which could be final as early as this week, includes about $750 million from underwriters that exercised their option to buy additional shares.

WASHINGTON — Without the unprecedented stimulus actions by the federal government triggered by the 2008 financial crisis, the Great Recession might still be going on, according to a study by Fitch Ratings. Those incentives, however, came with a price: accelerated budget deficits and rock-bottom interest rates that hurt savers, according to the credit rating company. Still, the $700-billion bailout fund, the $831-billion stimulus package and the Federal Reserve's near-zero interest rates, among other federal efforts, continue to spur the nation's economy, the study released Wednesday concludes.

WASHINGTON — The government's watchdog for the $700-billion Troubled Asset Relief Program disputed suggestions the bailout fund would turn a profit for taxpayers and warned that many small banks are still struggling to repay. "It is a widely held misconception that TARP will make a profit," said a report by Christy Romero, the special inspector general for TARP. The Obama administration has said TARP has turned a profit on about $205 billion injected into banks, but still projects losses for the entire fund.

WASHINGTON -- The government's watchdog for the $700-billion Troubled Asset Relief Program on Wednesday disputed suggestions the bailout fund would turn a profit for taxpayers, and warned that many small banks are still struggling to repay. "It is a widely held misconception that TARP will make a profit," said a report by Christy Romero, the special inspector general for the TARP program, known as SIGTARP. The Obama administration has said TARP has turned a profit on about $205 billion injected into banks, but still projects losses for the entire fund.

Re "The bucks stop here," editorial, Feb. 5 As a taxpayer, retired entrepreneur and business consultant, I strongly endorse President Obama's move to tie bailed-out corporations' executive compensation to shareholder value, and to make bonuses and retirement benefits contingent on repayment of bailout loans and interest. Reassuringly, it appears some bankers seem to be redirecting their efforts already. But how does the president propose similarly to focus federal and state government officials on effective use of the billions of dollars they are seeking?

Detroit native Mitt Romney has long contended that the U.S. automobile industry would be better off had the federal government not bailed out General Motors and Chrysler. In particular, he argued in 2008 and again in February (while campaigning in Michigan's Republican primary) that the companies should have restructured themselves without the feds' involvement through a "managed bankruptcy" process. But that ignores a crucial fact: Companies that are broke require money to keep operating, even while under the protection of a Bankruptcy Court.