Bush Seeks Final Bailout Funds at Obama's Behest

Obama acted quickly, sending prompt reassurances to congressional leaders that the money would aim to help free credit for small businesses and consumers and reduce the rising number of foreclosures. Separately, Larry Summers, Obama's choice for National Economic Council director, said the new president intends to also impose tougher restrictions and oversight on how the money is spent.

In this photograph provided by ABC News, President-elect Barack Obama is interviewed by George...

In this photograph provided by ABC News, President-elect Barack Obama is interviewed by George Stephanopoulos during the taping of "This Week with George Stephanopoulos" Saturday, Jan. 10, 2009 at the Newseum in Washington. (AP Photo/This Week, Lauren Victoria Burke)

(AP)

"Many of us have been disappointed with the absence of clarity, the lack of transparency, the failure to track how the money's been spent and the failure to take bold action," Obama said.

In a letter to congressional leaders, Summers said an Obama administration would "launch sweeping efforts to address the foreclosure crisis" and, in a bow to Republican critics of the plan, said it would seek to replace the government money with "private investments as quickly as possible."

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Obama and the Bush administration had been negotiating for days on how and when to seek access to the second half of the Troubled Asset Relief Program. His economic team also has been working with congressional Democrats, in particular House Financial Services Chairman Barney Frank, D-Mass.

Frank has introduced legislation that would require at least $40 billion of the money be used to reduce the number of foreclosures. His legislation also would set new conditions on institutions that receive the money, including limits on executive compensation. Frank's committee is holding a hearing on the program on Tuesday and the House is scheduled to vote on his legislation this week.

"We should not allow our disappointment at the Bush administration's poor handling of the TARP program to prevent the Obama administration from using the funds in more appropriate ways," Frank said in a statement Monday.

But other lawmakers were hardly supportive.

House Republican leader John Boehner of Ohio warned that it would be irresponsible to spend the money without a plan showing how the government would eventually extricate itself from underwriting the financial markets.