Treasury to extend TARP for 10 months

WASHINGTON, Dec. 9 (UPI) -- U.S. Treasury Secretary Timothy Geithner says he has extended the $700 billion Troubled Asset Relief Program until October with a new focus.

Geithner notified Congress of the extension Wednesday, the only step necessary for renewing the program for a second year, The New York Times reported.

The extension was expected. The TARP program, set up by former Treasury Secretary Henry Paulson Jr., has funded a variety of bailouts, although it has been criticized as skirting its mission of buying frozen assets from the nation's banks.

In his notification to Congress, Geithner wrote, "we want to see the capital base of our financial system return to private hands as quickly as possible."

However, "history suggest that exiting prematurely from policies designed to contain a financial crisis can significantly prolong an economic downturn," he wrote.

Geithner also said, "we do not expect to deploy more than $550 billion," and that loans would target small businesses and foreclosure prevention.

President Barack Obama recently called the program a necessary evil.

"There has rarely rarely been a less loved or more necessary emergency program than TARP," Obama said in a speech at the Brookings Institute Tuesday.