Geithner defends extension of bank bailout program

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Treasury Secretary Timothy F. Geithner today told a skeptical oversight panel that his decision to extend the government’s unpopular bank bailout program through October 2010 has set the stage for eventually shutting it down.

Geithner told the panel monitoring the $700-billion Troubled Asset Relief Program that it would have been irresponsible not to extend it.

But Elizabeth Warren, a Harvard University law professor who is chairwoman of the special congressional panel, told Geithner, “TARP has been far from an unmitigated success.” She said that consumers and small businesses were still having trouble obtaining loans.

And Paul S. Atkins, a former Securities and Exchange Commission member, said that extending the program “borders on irresponsibility” and would be a drain on taxpayers.

Geithner said the government would reduce its stake in banks as quickly as it prudently can.

-- Associated Press