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Paulson says won't stay at Treasury past January
August 10, 2008 / 2:20 PM / 9 years ago

Paulson says won't stay at Treasury past January

<p>Secretary of the Treasury Henry Paulson delivers remarks on markets and the economy at The New York Public Library in New York, July 22, 2008. REUTERS/Shannon Stapleton</p>

WASHINGTON (Reuters) - U.S. Treasury Secretary Henry Paulson said in an interview aired on Sunday he had no interest in staying in his post beyond January when a new administration takes office.

“I look forward to doing other things next year,” Paulson said on NBC television’s “Meet the Press” program. The interview was taped on Saturday in China.

“I‘m going to run right up until the end,” he said. “I‘m focused on getting everything done I can get done between now and January 19th.”

In March, Paulson proposed overhauling the U.S. financial regulatory system and giving more powers to the Federal Reserve in the wake of the financial market upheaval that exposed gaping holes in oversight.

Last month, he took heat from fellow Republicans in Congress who said his plan to backstop mortgage finance giants Fannie Mae and Freddie Mac was akin to socialism because shareholders reaped the profits in good times but the government was on the hook for losses when things went bad.

Paulson offered a richer credit line to the two government-sponsored entities and pledged to buy their shares if needed to bolster investor confidence, although he has said it was unlikely the companies would need to use the lifelines.

Fannie Mae and Freddie Mac finance nearly half of all mortgages in the United States and have been hurt as the housing crisis drove up delinquencies and foreclosures.

On Friday, Fannie Mae posted a $2.3 billion loss and cut its dividend. Paulson said that loss was not surprising given the state of the housing market and did not change his view that the companies would probably not need government cash.

“We have no plans to insert money in either of those institutions,” he said in the NBC interview. “It was very important that we get these temporary backup facilities because Fannie and Freddie are very important to our capital markets.”

Paulson said it would be well beyond the end of 2008 before the housing problems were resolved. Until that happened, the financial markets and the economy would remain strained, he said.

He dismissed the idea that the U.S. economy needed another round of economic stimulus after a $152 billion package passed earlier this year gave tax rebates to millions of households and incentives to businesses.

“Let’s see how this program works in the third quarter,” Paulson said, noting that the stimulus package succeeded in supporting growth in the second quarter, which ended in June.

Reporting by Emily Kaiser and Andy Sullivan; Editing by John O'Callaghan

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