Obama asks Bush to release remaining bailout billions
Published: Monday, January 12, 2009 at 12:05 p.m.
Last Modified: Monday, January 12, 2009 at 12:05 p.m.
WASHINGTON — The White House on Monday said President George W. Bush — acting on a request from President-elect Barack Obama — would ask Congress to release $350 billion more to prop up the troubled U.S. financial system, the remaining money left in the huge bailout fund put in place last year.
Congress may vote on the request as early as this week, according to senators briefed by Obama economic adviser Larry Summers on the financial rescue package in addition to Obama's separate plan for roughly $800 billion in spending and tax breaks to spur the economy.
Bush was issuing the formal request for the remaining $350 in the Troubled Asset Relief Program shortly after his final White House news conference in which he said he had yet to act on the issue, awaiting word from his successor.
The idea is to make the money available to the new administration shortly after Obama takes office next week.
The Obama economic team has been working with Congress to help smooth release of the massive block of federal dollars, suggesting it wanted to use more of the fund to relieve homeowners threatened with mortgage foreclosures, said Senate Banking Committee Chairman Christopher Dodd, a Democrat. A fuller accounting of the money already spent is needed as well, Dodd said.
Summers sought to win over Senate Democrats even as the Republican leader of the House, John Boehner, warned that any effort to release the additional money would be a tough sell.
The request was likely to force a vote within days on whether to block the funding, but the deck is stacked in favor of Bush and Obama winning release of the remaining $350 billion. Congress can pass a resolution disapproving the request, but the White House could veto the resolution; then, just one-third of either chamber would be needed to uphold the veto and win release of the money. Senate leaders would prefer to win a majority vote, Dodd said.
The unpopular bailout has featured unconditional infusions of money into financial institutions that have done little to account for it.
Treasury Secretary Henry Paulson originally promised the money would be used to buy up toxic mortgage-related securities whose falling values have clogged credit markets and brought many financial institutions to the brink of failure.
Work continued through the weekend on Obama's economic recovery plan, which features aid to cash-strapped state governments, tax cuts for most workers and working couples, a huge spending package blending old-fashioned public works projects with aid to the poor and unemployed, and a variety of other initiatives.
Obama, meanwhile, said on Sunday he was prepared for immediate involvement in Mideast diplomacy toward a solution to the Israeli-Palestinian conflict but once again refused to show his hand about specifics that would lead him to success where his predecessors have failed for more than a half-century.
Pressed on his silence about the raging war in the Gaza Strip, Obama quickly reverted to his contention that there can be only one president speaking for the United States on foreign policy issues, a position that has caused some to claim the incoming chief executive was being callous in the face of Palestinian suffering in the Israeli offensive to cripple the Hamas organization.
"I think that players in the region understand the compromises that are going to need to be made. But the politics of it are hard," Obama said in an ABC television interview broadcast Sunday. "And the reason it's so important for the United States to be engaged and involved immediately, not waiting until the end of their term, is because working through the politics of this requires a third party that everybody has confidence, wants to see a fair and just outcome."
The incoming leader, who has been receiving daily national security briefings since his election in November, also acknowledged that his campaign pledge to close the prison at Guantanamo Bay will be more of a challenge than he anticipated. Many of those held at the military site are suspected terrorists or potential witnesses in cases against them.
"It is more difficult than I think a lot of people realize — and we are going to get it done — but part of the challenge that you have is that you have a bunch of folks that have been detained, many of whom may be very dangerous who have not been put on trial or have not gone through some adjudication," he said.
Also on Monday, Obama meets in Washington with Mexican President Felipe Calderon in a session that was expected to cover U.S. immigration policy, efforts to diminish the flow of elicit drugs out of Mexico and the violence raging there that is slopping over into the United States.
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