The Obama administration is working on a plan that would take money from the TARP—the $700 billion fund intended to rescue banks—and lend it to small businesses, the Washington Post reports. The money would come with few restrictions, and the government would pick up as much as 90% of the tab should the businesses fail. Most of the country’s jobs, proponents argue, come from companies with fewer than 500 employees.
But shifting TARP money to them would be the most dramatic change in direction yet for the windblown fund, which has already strayed far from its original mandate by helping auto companies and life insurers. Timothy Geithner supports the plan, sources tell the Post, but Larry Summers is skeptical.