Embattled Treasury Secretary Tim Geithner (right) is expected Monday to unveil a $1 trillion plan to buy toxic assets from troubled U.S. banks.
That’s right: $1 trillion with a "t."
Geithner’s latest uber-expensive bank bailout comes as a new poll from National Public Radio shows President Barack Obama’s job approval rating slipping with a nervous American public and the Republican Party returning from the dead with rising support among the masses.
For Democrats, that means trouble with a "t."
For Obama, the reality of governing is proving to be a lot tougher than winning an election for President.
If the numbers from the NPR poll turn into a trend, it could mean the President whose time had come may be the leader whose time has passed.
Stay tuned. It’s going to be a wild ride.
The Treasury Department is expected to unveil early next week its long-delayed plan to buy as much as $1 trillion in troubled mortgages and related assets from financial institutions, according to people close to the talks.
The plan is likely to offer generous subsidies, in the form of low-interest loans, to coax investors to form partnerships with the government to buy toxic assets from banks.
To help protect taxpayers, who would pay for the bulk of the purchases, the plan calls for auctioning assets to the highest bidders.
The uproar over the American International Group’s bonuses has not stopped the Obama administration from plowing ahead. The plan is not expected to impose restrictions on the executive pay of private investors or fund managers who participate.
The three-pronged approach is perhaps the most central component of President Obama’s plan to rescue the nation’s banking system from the money-losing assets weighing down bank balance sheets, crippling their ability to make new loans and deepening the recession.
Industry analysts estimate that the nation’s banks are holding at least $2 trillion in troubled assets, mostly residential and commercial mortgages.
The plan to be announced next week involves three separate approaches. In one, the Federal Deposit Insurance Corporation will set up special-purpose investment partnerships and lend about 85 percent of the money that those partnerships will need to buy up troubled assets that banks want to sell.
In the second, the Treasury will hire four or five investment management firms, matching the private money that each of the firms puts up on a dollar-for-dollar basis with government money.
In the third piece, the Treasury plans to expand lending through the Term Asset-Backed Securities Loan Facility, a joint venture with the Federal Reserve.
President Obama entered office with very high approval ratings. Now, for the first time since he took office, the president’s approval ratings have slipped from 64 percent to 59 percent.
Just as the economic news was relentlessly negative until the last few days, poll numbers for Republicans were horrific for months. So the GOP should be heartened by the first encouraging polling news it has received perhaps since Lehman Brothers defaulted in mid-September: Republicans have pulled even with Democrats on the generic congressional ballot test, according to a survey by a respected pair of firms.
In the new National Public Radio poll conducted by the Democratic polling company Greenberg Quinlan Rosner Research and its Republican counterpart, Public Opinion Strategies, 42 percent of the 800 likely voters surveyed March 10 to 14 said that if the next congressional election were held today they would vote for the Republican candidate; an identical percentage of respondents said they would vote for the Democratic one. For several years, Democrats held a substantial lead on this question.