Treasury Denounced Over Bailout

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WASHINGTON — The Treasury secretary, Henry M. Paulson Jr., on Tuesday rejected pleas to use money from the $700 billion bailout program to help homeowners avoid foreclosure or to stave off bankruptcy by Detroit’s Big Three automakers.

Facing a barrage of complaints from Democratic lawmakers that he was ignoring the will of Congress, Mr. Paulson dug in his heels and said he wanted to put money only into financial institutions.

“The primary purpose of the bill was to protect our financial system from collapse,” Mr. Paulson told the House Financial Services Committee. “The rescue package was not intended to be an economic stimulus or an economic recovery package.”

Democrats pummeled the Treasury secretary in response, with some accusing him of carrying out a “bait and switch” by discarding his original plan and others expressing fury that the Treasury had allocated $290 billion for banks and insurance companies but nothing for individual homeowners.

http://www.nytimes.com/2008/11/19/business/economy/19bailout.html?th&emc=th