The FDIC and Treasury bosses battled today over how bailout funds should be deployed.
FDIC chief Sheila Bair proposes that part of the $700 billion be used to help homeowners avoid foreclosure. She suggests that mortgage help would strike at the root of the financial crisis and help bring us out.
Secretary Henry Paulson disagrees, and plans to use the money to inject capital into troubled banks. He believes that we'll muddle our way out of this once the banks start making affordable loans available to a wider population.
Paulson will spend half of the $700 billion, and leave the rest for the Obama administration to manage.
Further reading:
There’s an up-to-date breakdown of the government rescue funds from the Fed, FHA, Treasury, etc. at this bailout site.