U.S. Treasury not ready to seek more bailout funds

WASHINGTON, March 23 - The U.S. Treasury does not know whether it will need more federal funds to stabilize the U.S. financial system, but it still has "substantial resources" from the $700 billion bailout to launch its asset purchase plan, Treasury Secretary Timothy Geithner said on Monday.

"We will work with the Congress to try to make sure there are enough resources over time to do this right, but the judgment about what is going to be required is a judgment we don't need to make at this time and are not prepared to make at this time," Geithner told reporters during a briefing.

He also said the administration will work with Congress to make sure executive compensation restrictions do not hinder the government's economic recovery efforts.

"We need to balance that basic objective that we not reward failure against the acutely important imperative that we get the financial system doing what it needs to do for recovery," Geithner said.

The U.S. House of Representatives last week passed legislation to to recoup controversial bonuses paid to American International Group Inc. Public outrage erupted last week at the fact that AIG paid $165 million in bonuses after receiving $180 billion in government aid.

Lawmakers said they are considering further legislation to prohibit bonus payments by companies which have received government bailout funds. Firms receiving bailout funds are already restricted from paying senior executives more than $500,000 in total annual compensation and cannot pay out "golden parachutes" to retiring executives.

Geithner also said asset managers and investors who participate in public-private partnerships to buy distressed assets from banks will not be subjected to new executive compensation restrictions as part of the program.

"These are generally available programs. They are designed like the housing plan, like the small business plan to get these broader markets working again. For those reasons, the compensation limits do not apply to the asset managers and investors in the program," he said.

Geithner did not rule out the possibility that the administration will have to approach Congress for more bailout funds beyond the $700 billion allocated for the Troubled Asset Relief Program .

He said the administration will work with Congress to make sure the recovery efforts have the "maximum impact," which he said requires substantial resources.

"The basic lesson of financial crises is that you get recessions that are shorter, they cause less damage, you get lower future deficits, and you solve the crisis at the least cost to the taxpayer if you can move more forcefully earlier," Geithner said.