U.S. may widen bailout beyond banking sector

The federal government could take tens of billions of dollars in ownership stakes in an array of companies outside the banking sector, dramatically widening the scope of the Treasury Department’s rescue effort, government and industry officials told the Washington Post.

If President-elect Barack Obama approves the program, it could ultimately involve hundreds of billions of the $700-billion rescue package. Two industry sources familiar with the plan said Treasury was holding off on an announcement to ensure that Obama agreed and would not reverse course once he took office.

An administration official contested that explanation, saying the department wanted to give its initial $250-billion bank plan a chance before injecting more money into the financial system.

The new initiative would make it easier for the Treasury Department to aid a wider variety of firms if their troubles put the financial system at risk, government and industry officials said.