The Obama administration is extending TARP to 2010.

Treasury Secretary Timothy Geithner plans to tell Congress that the Obama administration will extend the $700 billion financial-rescue program until next October, according to people familiar with the matter.

While the Troubled Asset Relief Program expires on Dec. 31, Geithner can extend it by notifying Congress. A letter notifying Congress of the extension could come as soon as today, said the people, who declined to be identified. Andrew Williams, a Treasury Department spokesman, declined to comment.

The TARP, passed in October 2008 to prevent a collapse of the financial system, has drawn criticism from Congressional opponents of taxpayer-funded bailouts of banks including Citigroup Inc. The Obama administration, preparing the ground for an extension, has emphasized that the program may also be used to aid homeowners and small companies.

“There has rarely been a less loved or more necessary emergency program than TARP,” President Barack Obama said yesterday in a speech in Washington. “I’m asking my Treasury secretary to continue mobilizing the remaining TARP funds to facilitate lending to small businesses.”

While it's good to start lending to small business, isn't it amazing one of the selling points on TARP was to unfreeze credit markets so small business could obtain loans?

It's quite confusing what's really going on with these funds. Supposedly Obama's jobs program will only get $73 billion from TARP.

Meanwhile COP, the watchdog arm of TARP, says (we will overview the report in more detail later today):

The U.S. government's $700 billion bailout program helped stabilize the financial system, but has done little to boost lending or stave off millions of home foreclosures.