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Treasury Secretary Timothy Geithner testifies at a Senate Agriculture, Nutrition and Forestry Committee hearing on Capitol Hill in Washington, D.C. - 


Kai Ryssdal: The Obama administration got a little boost from a congressional oversight panel today. In its year-end audit of the bank bailout more commonly known as TARP, the panel said that despite its flaws TARP did what it was supposed to do: nip an economic panic in the bud.

The timing really could not have been better for Treasury Secretary Timothy Geithner. He announced today that he's going to extend TARP through next October. The secretary said he needs the money that hasn't been spent so far -- as much as $200 billion in case financial conditions "threaten our economy." To which I say, what, maybe he knows something we don't? Here's our New York bureau chief Amy Scott.

AMY SCOTT: The bailout fund was set to expire at the end of this month.

Louis Crandall is chief economist with Wrightson ICAP, a research firm. He says letting the program expire would have been like taking away the safety net before you've reached the end of the tightrope.

LOUIS CRANDALL: We still face very serious problems in the commercial real-estate sector. And if some of those led to a severe strain on an institution, it's not inconceivable that we would need to stabilize that institution.

Today Secretary Geithner said any new spending would boost small business and consumer lending, and prevent foreclosures.

But critics say Democrats want to use the program as a piggy bank.

Alex Pollock is a fellow with the conservative American Enterprise Institute.

ALEX POLLOCK: If you have a pot of money there, there's a temptation to want to spend it. But the pot of money isn't authorized just to be spent.

Republicans have pushed to let the fund expire, and use the leftover money to defray the deficit. Some Democrats in Congress want to use unspent TARP money to create jobs.

Michael Ettlinger is with the left-leaning Center for American Progress. He says when the program was created, financial stability was the big concern.

MICHAEL ETTLINGER: Now the problem is much more the lack of jobs, and so moving the resources to address that makes a lot of sense.

Ettlinger says Treasury can use the money to indirectly stimulate job growth, by supporting lending. He says Congress would have to approve direct spending to create jobs.

In New York, I'm Amy Scott for Marketplace.

Follow Amy Scott at @amyreports