Tuesday November 25, 6:57 pm ET
By Martin Crutsinger, AP Economics Writer
Emergency rescue efforts totaling $800 billion aim to loosen credit for consumers, businesses
WASHINGTON (AP) — Rolling out powerful new weapons against the financial meltdown, the Bush administration and the Federal Reserve pledged $800 billion Tuesday to blast through blockades on credit cards, auto loans, mortgages and other borrowing. Total federal bailout commitments neared a staggering $7 trillion.
Treasury Secretary Henry Paulson, who has been criticized for constantly revising the original $700 billion rescue program, said the administration was considering even more changes in its final two months in office.
Reports on the nation’s economic health weren’t getting any better. The Commerce Department said the overall economy, as measured by the gross domestic product, declined at an annual rate of 0.5 percent in the July-September quarter, even worse than the initial 0.3 percent estimated a month ago as consumer spending fell by the largest amount in 28 years.
In Chicago, meanwhile, President-elect Barack Obama named his budget director and said they both will focus on the nation’s soaring budget deficit — but only after economic revival is under way. Paulson stressed that Obama’s transition team was being kept informed of the government’s moves.
Investors digested it all and sent the Dow Jones industrials 36 points higher, a modest gain but still the first time the average had risen three straight days in more than two months.