WASHINGTON - Treasury Secretary Henry Paulson yesterday threw cold water on the efforts of municipal market participants to convince the Treasury to purchase troubled state and local debt or to assist transit agencies facing millions in exposure to the beleaguered insurance giant American International Group Inc.

That is "not the focus of TARP," he said at a morning press conference, referring to the $700 billion Troubled Asset Relief Program. "The focus of TARP, as you know, is to stabilize financial institutions and strengthen the financial system for both lending and so on."

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