Obama administration unveiling bailout overhaul

The Obama administration is promising an aggressive effort to combat the worst financial crisis in seven decades, unveiling a program that could mobilize well over $1 trillion in public and private support to get the frozen credit markets functioning again. Treasury Secretary Timothy Geithner said today the new plan would bring the full force of the federal government to bear in a partnership with the private sector. “Right now critical parts of our financial system are damaged,” Geithner said. “Instead of catalyzing recovery, the financial system is working against recovery and that’s the dangerous dynamic we need to change.” The new plan would greatly expand an effort to unclog credit markets that provide loans to consumers and businesses. Funding for this effort would see a huge increase—from $20 billion up to $100 billion—according to administration officials. If a total of $100 billion from the bailout fund were used, it would be enough to support an additional $1 trillion in lending support through a Federal Reserve program announced in November but not yet operational.