February 19, 2009
President Obama was hit with another wave of grim financial news yesterday, amid signs that his Administration is in danger of being overwhelmed by the scale of the economic crisis.
As he outlined a $75 billion (£52 billion) plan to halt home repossessions across America, evidence emerged of the enormous struggle Timothy Geithner, the Treasury Secretary, is having to come up with a detailed solution to stabilise the stricken banking sector.
Chrysler and General Motors also said that they needed up to $22 billion more in government funds to avoid collapse, leaving Mr Obama the difficult decision of whether to keep pumping taxpayers’ money into the carmakers.
The motor industry received $17.4 billion in federal funds in December. Its bankruptcy could cause millions of job losses. Mr Geithner and Lawrence Summers, the White House economic adviser, must determine by March 31 whether the companies’ plans for long-term survival are viable.
In another sign of the depth of the recession a report showed that construction of homes and applications for future projects dropped by 17 per cent last month to a record low.
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