WASHINGTON D.C., USA (Worthy News) -- The U.S. Government, Senate and Federal Reserve on Tuesday, February 10, rushed to approve measures of roughly $3 trillion to save the financial system, as the president warned that America's economic crisis was more serious than previously thought.
The current economic crisis is "as deep and as dire as any since the Great Depression," President Barack Obama said.
United States Treasury Secretary Timothy Geithner topped the day, unveiling a new bank-bail out plan that experts said could reach $2 billion.
At the center of Geithner's plan is a public-private partnership to buy as much as $1 trillion of bad loans still on the books of financial institutions, effectively creating what is known as 'a bad bank.'
Geithner said that it was also agreed that the Federal Reserve lending program will be expanded to $1 trillion from $200 billion. The Federal Reserve confirmed it would commit up to $1 trillion to make loans more widely available to consumers.
It was unveiled as the Senate voted 61-37 to approve a separate, $838 billion economic-stimulus plan, with three moderate Republicans joining with the Democratic majority to overcome attempts by the minority party to block the legislation.
Lawmakers in the House and Senate were to gather to iron out the considerable differences between two versions of the legislation in an attempt to make President Obama sign the stimulus plan into law, within a week.
President Obama got word of the bill's passage while he attending a town hall meeting in the economically-stricken area of Fort Myers, Florida. "That's good news and I want to thank all of the members of the Senate who have moved te process forward," the president said. "We've still got to get the House bill and the Senate bill to match up before it gets sent to my desk, so we got a little more work to do over the next couple of days. But it's a good start."
However it was not immediately clear how legislators would react to his administration's bank-bail out plan. "Right now critical parts of our financial system are damaged. Instead of catalyzing recovery, the financial system is working against recovery, and that's the dangerous dynamic we need to change," Geithner stressed.
Yet, stocks dropped as investors expressed concern about a lack of specifics on plans from the Obama administration for addressing toxic assets.
The Dow Jones fell a whopping 381.99 points to close at 7888.88. Other broader indexes also fell. The Standard & Poor's 500-stock index shed 42.73 points, or 4.91 percent, to close at 827.16. The teach-heavy Nasdaq composite index sank 66.83 points, or 4.20 percent, to close at 1524.73. (With reporting by Worthy News' Stefan J. Bos and George Whitten).