President-elect Barack Obama asked President Bush today to request the release of the second $350 billion in federal bailout funds so he would have "ammunition" if the country's fragile economy weakened further.
The White House said that Bush has agreed to request the money.
Obama, speaking after a meeting with Mexican President Felipe Calderon, said it would be "irresponsible" to enter the White House without having asked Bush to request the funds. He called the cash "potential ammunition" in case the economy worsened.
The incoming president also signaled that he intends to "fundamentally change some of the practices" in the bailout program. Referring to how the first $350 billion of bailout cash was allocated, Obama said, "Many of us have been disappointed with the absence of clarity, the failure to track how the money's been spent."
Obama and Bush have teamed up to get the money released. Bush has agreed to request the funding, and Obama will lobby for it by arguing that he will "rebrand" the program and make better use of the money.
In a letter to congressional leaders, Obama's top economic adviser Larry Summers called the need for the second round of funds from the Troubled Asset Relief Program is "imminent and urgent."
In his letter, Summers said the money would be used for a "sweeping effort" to save homeowners threatened with foreclosure, and make the money available to small banks and businesses along with corporate giants.
"I have talked to the president-elect about this subject," Bush said at his farewell news conference today.
"I told him if he needed the $350 billion on my watch, I'd be willing to ask for it.. if he felt like it needed to happen on my watch," Bush said.
A short time later, Obama asked Bush to make the request official.
"This morning, President-elect Obama asked President Bush to formally notify Congress, on his behalf, of his intent to exercise the authority... to access the last tranche of $350 billion in funding for Treasury programs addressing the financial crisis," White House spokeswoman Dana Perino said. "President Bush agreed to the President-elect's request."
The team tactic is one of several steps Obama is taking this week to prepare the way for his own administration, which officially begins next week.
In other signs that Team Obama is about to take over, his Cabinet members, including State Department-designate Hillary Clinton, will start trooping to Capitol Hill for confirmation hearings this week. Obama is expected to name a replacement for commerce secretary. And the president-elect has narrowed the selection of a White House dog to a labradoodle and a Portuguese water dog.
The economy, however, looms over all else.
Sen. Christopher Dodd, D-Conn., who chairs the Senate Banking Committee, warned on "Good Morning America" today that a new wave of mortgage defaults may be on the horizon, putting as many as 8 million homes in jeopardy.
Obama is still putting together the details of his estimated $775 billion economic rescue plan. But in addition to that bonanza, he wants Congress to release $350 billion remaining from the $700 billion it already approved last fall.
Congress is hesitant, claiming the Bush administration handed the money to mega banks without any conditions, without any means to determine how the money is spent and with little of it going to help beleaguered homeowners avoid bankruptcy.