Leave your feedback Share Copy URL https://www.pbs.org/newshour/show/government-widens-support-for-home-loans-credit Email Facebook Twitter LinkedIn Pinterest Tumblr Share on Facebook Share on Twitter Transcript In an effort to boost economic activity, the Fed and the Treasury announced new plans to boost consumer spending and aid the housing market. Economic analysts examine the Fed's expanding role in managing the crisis. Read the Full Transcript Notice: Transcripts are machine and human generated and lightly edited for accuracy. They may contain errors. JUDY WOODRUFF: We begin with the economic crisis and with the Federal Reserve's latest infusion of money and credit to ease the financial crunch. Jeffrey Brown has the story. JEFFREY BROWN: The $800 billion from the Fed is aimed at jump-starting mortgage lending amid the continuing housing correction and consumer spending, which declined precipitously over the summer.The Fed will act in two ways. It will buy up to $600 billion in debt and mortgage-backed securities issued by Fannie Mae, Freddie Mac, and other government-sponsored finance agencies. This is aimed at helping the housing market.And it will loan up to $200 billion to holders of securities backed by debt from credit card, auto and student loans. The intention is to make new lending possible.The Treasury will provide some protection for the consumer debt initiative by pledging $20 billion in funds from the so-called TARP program.Treasury Secretary Henry Paulson described the thinking behind the moves this morning. HENRY PAULSON, U.S. Treasury Secretary: Millions of Americans cannot find affordable financing for their basic credit needs. And credit card rates are climbing, making it more expensive for families to finance everyday purchases.This lack of affordable consumer credit undermines consumer spending and, as a result, weakens our economy. Nothing is more important to getting through this housing correction than the availability of affordable mortgage finance. It will take time to work through the difficulties in our market and our economy, and new challenges will continue to arise. JEFFREY BROWN: Perhaps in anticipation of those new challenges, Paulson said that the $200 billion consumer debt program was just a starting point.As the Fed and Treasury continue to work in tandem, Paulson also said they're working closely with the Obama team, particularly Treasury Secretary-designate Tim Geithner. He's currently president of the New York Federal Reserve Bank and a key player in the ongoing government response. HENRY PAULSON: We've all worked together. And this is an important part of what we do.Now, in looking at Tim's new job as Treasury secretary and incoming Treasury secretary, we will obviously work seamlessly with the next administration on a first-rate transition.And we will discuss with them very, very carefully any programs that we are developing and any programs that we implement, because it's very important that the next team understand everything we have in place and to be able to carry them out effectively.