Congress, Obama could spar over $350B request
WASHINGTON -- President-elect Barack Obama on Monday urged Congress to let his incoming administration use another $350 billion in financial bailout funds, saying the next round of spending would do more to help Main Street than Wall Street.
At Obama's request, President Bush formally asked Congress Monday for the second half of the $700 billion rescue package.
The request sets up what could be Obama's first confrontation with Congress, which is controlled by his fellow Democrats. The $350 billion will become available to the Treasury Department within 15 days unless Congress passes a law to prevent it.
Some Republicans, including House Minority Leader John Boehner of Ohio, said they intend to oppose more spending.
"If we all thought that throwing in an extra $350 billion would solve all the problems in the economy, that would be one thing," said Rep. Jeb Hensarling, R-Texas, a member of the House Financial Services Committee. "But last time I looked, there's still a lot of questions about whether this plan has been effective."
Senate Minority Leader Mitch McConnell, R-Ky., said he would be "hard pressed" to support the spending without assurances that money will not be misspent.
Lawmakers from both parties have criticized the Treasury Department's management of the program. Treasury used the first $350 billion not to buy toxic mortgage-related debt as promised but to buy stock in healthy banks, prop up failing insurer American International Group and provide last-ditch loans to General Motors and Chrysler.
"We're not going to presume that we're in a strong position because we're not," Sen. Dick Durbin, D-Ill., said of the request's chances. "There are a lot of people who are critical … of the first $350 billion spent by the Bush administration."
Senate Majority Leader Harry Reid, D-Nev., said in a statement that "the American people have a right to be wary of this request," but he is encouraged by Obama's plans for the money.
The Senate could vote on the bailout as early as Thursday, said Reid spokesman Jim Manley.
