US Treasury Secretary Henry Paulson has announced the 700 billion dollar government rescue package will not be used to purchase troubled assets as originally planned.
He also addressed concerns about the nation's auto industry.
Paulson revealed the administration was moving away from a strategy of using the bailout billions to buy the troubled assets of financial institutions.
Henry Paulson, US Treasury Secretary, said, "Our assessment at this time is that this is not the most effective way to use TARP funds, but we will continue to examine whether targeted forms of asset purchase can play a useful role, relative to other potential uses of TARP resources, in helping to strengthen our financial system and support lending."
The bailout plan, known as the Troubled Assets Relief Program, or TARP, was initially constructed to purchase bad home mortgages in response to the sub-prime credit crisis in US real estate markets.
Paulson announced on Wednesday that the new goal for the program was to support financial markets, which supply consumer credit in credit card debt and student loans.
He also pledged that the administration will continue to use 250 billion dollars to purchase stock in banks to bolster their balance sheets and encourage them to resume more normal lending.
In recent days president-elect Barack Obama and fellow Democrats in Congress have advocated for a second stimulus plan, as well as additional funds for the struggling U.S. auto industry.
Paulson indicated the auto bailout is under consideration, but any plan must be crafted with an eye toward a long term solution for the nation's car manufacturers.
(CCTV November 13, 2008)
