Today, the U.S. Department of the Treasury (Treasury) issued a press release highlighting key components of President Obama’s budget for fiscal year 2011. The main goals for the budget are to take measures to start reducing the federal deficit and to provide for targeted spending on programs intended to create jobs. With respect to the financial services industry, Treasury states that “This Budget supports the critical work that Treasury is doing to encourage economic growth and ensure that the financial industry plays by new, safer rules.”
With respect to the Trouble Asset Relief Program (TARP), the cost of which has already been less than expected , Treasury indicates that “the projected cost of TARP has fallen from $341 billion in the Mid-Session Review to $117 billion in this Budget, and the additional $250 billion reserve in place in the event additional financial stabilization efforts were necessary has been removed.” In addition, going forward, Treasury will use TARP funds to focus on the challenges of helping “responsible homeowners to avoid foreclosure, and will transfer, through legislation, $30 billion from TARP to a new program to help community and smaller banks give small businesses the credit they need.”
Furthermore, the budget will provide $13.9 billion in targeted investments for Treasury to:
- expand its institutional capacity to more effectively respond to current and future financial challenges;
- improve taxpayer service at the IRS;
- increase enforcement to crack down on tax cheats;
- invest in the needs of communities through Community Development Financial Institutions; and
- address global economic challenges.