US extends bailout plan until October

The US has extended its 700-billion dollar financial bailout program until October. The administration insists the bailout fund is still needed to prevent further economic turmoil.

In his notification to Congress on Wednesday, Treasury Secretary Timothy Geithner announced the bailout will be effective until October 3rd next year. Geithner called the extension a response to "an immediate and substantial threat to the economy stemming from financial instability".

The new commitments will be limited to three areas funding to avoid mortgage foreclosures, boosting capital for small and community banks, and a potential increase of consumer and small business lending.

Geithner says the administration plans only limited use of the Troubled Asset Relief Program, or TARP, over the next year. He expects 550-billion dollars will be spent.

The TARP was passed during the height of the financial crisis last October. It was scheduled to expire at the end of this year, but many Americans have been dissatisfied with the administration's use of the fund to save Wall Street and automakers.

The Treasury Department says this time the extension will help homeowners and small businesses.