by Calculated Risk on 12/10/2009 10:30:00 PM

From David Cho at the WaPo: Joblessness plan revamps rules on bank bailouts (ht Mr. Ridgeback goes to Washington)

The Obama administration is developing a major initiative to tackle ... unemployment by getting federal bailout funds into the hands of small businesses.

The proposal involves spinning off a new entity from the Troubled Assets Relief Program that could give banks access to the government money without restrictions, such as limits on executive pay, as long as they use it to make loans to small businesses. ... No dollar figures have yet been attached to the new small-business lending effort, which is still in development, the sources said.

... [a "special-purpose vehicle"] would be financed by rescue funds and would lend to banks that provide small-business loans. In theory, this structure would free banks of the TARP conditions because they would be getting the money from a separate entity. They could also avoid being labeled as a TARP recipient.

Another SIV proposal, this time to lend TARP money that isn't ... uh, TARP money? Why does this remind me of Hank Paulson?

I'd definitely like to see the plan for the next stimulus package, instead of focusing on these contortions to get it funded.