By Martin Crutsinger
AP Economics Writers
Washington — The Obama administration has extended the $700 billion Troubled Asset Relief Program until October, setting up a struggle between Democrats who favor using some of the leftover money to help generate jobs and Republicans who say it should be used to shrink soaring budget deficits.
The administration insists the program is still needed to prevent further turmoil in the banking system. In announcing the decision Wednesday, Treasury Secretary Timothy Geithner said extending the program also will help homeowners struggling to avoid losing homes to foreclosures and small businesses having trouble getting loans.
The administration is now projecting the losses to the government from the bailout program will be around $141 billion — $200 billion less than it estimated two months ago.
President Barack Obama said the freed-up money can help reduce the record-high federal budget deficit and “invest in job creation on Main Street rather than Wall Street.”
But Republicans vowed to keep trying to close down the rescue program by the end of this month. They said any leftover funds should be devoted exclusively to curbing the country’s soaring budget deficits.