The administration plans to expand a $5 billion tax-credit program intended to aid economically distressed communities across the country, Treasury Secretary Timothy Geithner announced Friday.

The president’s 2010 budget plan doubles funding for the Community Development Financial Institutions fund, which helps provide loans to small businesses and consumers in disadvantaged communities that lack access to affordable credit, reported the Wall Street Journal.

The tax credit program, funded by the economic stimulus package, will reward private sector companies that invest in energy, education, health care and manufacturing projects to create jobs in low-income areas. The credit would cover 39 percent of the cost of the investment over a seven-year period.

The head of the U.S. Treasury is making good on a promise to take billions worth of toxic assets off the books of U.S. banks.

In a Feb. 10 Reuters story carried by Businessworld , Treasury Secretary Timothy Geithner was set to lay out a rescue plan based on a mix of public and private funds to wipe clean $500 billion of such troubled assets.

While details were light, Reuters reported that sources said the plan would also extend a Federal Reserve program allowing the U.S. central bank to extend up to $1 trillion in loans.

But what was clear in the days following the announcement was that the U.S. had learned from the shocking failure of investment bank Lehman Brothers, which went under in September, marking the largest bankruptcy in U.S. history, and would not let other banks fail.

The plan also included a huge boost in the government’s stakes in one key bank, Citibank, bringing it up to a possible 36 percent, reports said.

Geither’s plan follows a Feb. 9 press conference where President Barack Obama told reporters that cleaning up banks’ balance sheets was a priority and didn’t rule out the possibility that it will take more money than the $700 billion Congress already has approved to complete the job, Reuters said.

“We don’t know yet whether we’re going to need additional money or how much additional money we’ll need until we see how successful we are at restoring a level of confidence in the marketplace,” Obama said.

Obama then called on Congress to speedily approve both Geithner’s plan and an economic stimulus package to complement the revamped bank-rescue proposals, Reuters said.

“If you delay acting on an economy of this severity, then you potentially create a negative spiral that becomes much more difficult for us to get out of,” Obama said. “This is not your ordinary, run-of-the-mill recession, we are going through the worst economic crisis since the Great Depression.”

Geithner, the former president of the New York Federal Reserve Bank, said banks will be closely monitored and tested.

“The spectacle of huge amounts of taxpayer money being provided to the same institutions that helped cause the crisis, with limited transparency and oversight, added to public distrust,” Geithner said in remarks prepared for delivery after the release of the new measures, Reuters said.

President Barack Obama was set to sign into law his $787 billion economic stimulus package on Feb. 17 in Denver, emerging with a document bruised but alive after weeks of partisan fighting.

Republican lawmakers fiercely opposed the plan, while some Democrats joined the chorus, saying it didn’t go far enough.

It advanced earlier in the month after squeaking by in a procedural vote in the Senate with mostly Democratic support. But then business groups and GOP officials began seeking broader Republican backing, USA Today said in a story in its Feb. 9 editions. Key support appeared to come from GOP governors eager for federal dollars to help plug enormous state budget gaps.

To the administration, the plan perhaps couldn’t come together fast enough. Economic indicators continued to slide and Wall Street did little more than lurch day to day. In the week before the expected signing, the Dow shed 5.2%.

Here’s what’s inside the package, according to USA Today:

• $1 trillion from the Federal Reserve to buy bonds and other assets to boost consumer loans.
• $500 billion to $1 trillion from the government and private investors to buy distressed securities from financial institutions.
• $545 billion in spending, $293 billion in tax cuts in the Senate stimulus which was later reconciled with the $820 billion House version.
• $50 billion from the government to stem mortgage foreclosures.