Obama plans to buy 'toxic assets'

Obama Administration plans to use bailout fund money to rid banks of up to $1 trillion of 'toxic assets' that triggered financial meltdown.

The US will offer $75 billion to $100 billion from its bailout fund to help private investors and buy the assets in a program seeking to put government money alongside private capital. 

The Public Private Investment Program involves the Federal Deposit Insurance Corp, a US bank regulator, and the Federal Reserve, as well as the Treasury Department and the private sector. 

There has been criticism of the proposal even before it is officially announced but the White House has defended Treasury Secretary Timothy Geithner's plan to rescue US banks. 

Christina Romer, head of the White House's Economic Advice Council, defended the initiative, saying it will jump-start the economy. Romer told Fox News that she's confident the US economy will recover by 2010. 

Some US politicians have called for Geithner's resignation over his failure to block millions paid in bonuses to executives of insurer giant AIG. President Barack Obama, however, has said he will reject Geithner's resignation if it was ever tendered. 

Obama on Sunday warned of a systemic collapse of the country's financial system if another big financial institution fails, warning that some institutions like bailed-out insurer AIG and Citigroup are so big that their failure could have a domino-effect on others.