U.S. bailout plan could help carmakers with AAA paper

WASHINGTON (Reuters) - U.S. Treasury Secretary Henry Paulson said on Tuesday his department has broad powers under the $700 billion (466 billion pound) financial rescue program to make funds available to captive finance companies -- subsidiaries that finance sales of their parent companies' products.

"Under the current plan we've outlined, the only capital plan we have in place, they're not eligible," Paulson told the U.S. House Financial Services Committee. "If we were to implement the program we're working on with the (Federal Reserve) -- where we put a small amount of money into a Fed liquidity facility -- that facility could provide support for triple-A auto paper."

Paulson also said he does not want to see a U.S. automaker fail. "We do not believe it is desirable to have an auto company fail with the economy in this current situation," he said during the panel's hearing on the financial rescue program.

(Reporting by Karey Wutkowski; editing by John Wallace)