WASHINGTON —

President-elect Barack Obama pounded home the need for fast action on huge spending plans to rescue the American economy in a meeting with lawmakers Tuesday as he prepares to take office in a week.
 
Shifting roles from a politician seeking the presidency to a soon-to-be chief executive facing the country’s worst economic crisis nearly 80 years, Obama will be on a mission of gentle persuasion—and not so gentle arm-twisting as needed—among lawmakers who must approve use of the second half of the $700 billion financial bailout fund.
 
Obama asked Democratic senators not to stand in the way of the additional $350 billion in bailout funds, calling the money essential to helping the troubled economy. He made his pitch in a meeting Tuesday in the Capitol, where he attended the Democratic senators’ closed-door luncheon.
 
Lawmakers who emerged from the session said the president-elect pledged to correct what they believe were shortcomings in the way the Bush administration handled the first $350 billion. They added he would veto any attempt to block his own administration’s use of the funds.
 
Obama’s transition team prepared to dispatch top aides to meet with Senate Republicans this week in anticipation of a possible vote Thursday on whether to release the remainder of the money in the embattled rescue fund for the financial sector, called the Troubled Asset Relief Program, or TARP.
 
Obama’s feverish work on the economy since returning to the capital a little more than a week ago has been a rare break with U.S. history. Presidents-elect normally stay in the background until inauguration day, working out of sight to form a new government. But the incoming administration has judged America’s economic destiny endangered absent swift and immediate action, and historic protocol has been swept aside.
 
The TARP relief measure was rushed through Congress in September as several major U.S. financial institutions failed or were on the verge of collapse.
 
In the House, the Financial Services Committee Chairman Barney Frank, a Democrat, was presiding over a hearing on the bailout program in advance of legislation that would place tough new restrictions on recipients of the money and require spending to reduce mortgage foreclosures.
 
Frank’s bill is scheduled to reach the floor of the House on Wednesday, with a vote set for Thursday.
 
“If we do not get the second $350 billion, I do not see any way that we can get substantial foreclosure relief,” Frank said, referring to the rising number of homeowners losing their homes because they are unable to pay their mortgages.
 
At the Treasury Department, officials were putting in place tools to measure whether banks that receive funds from the $700 billion rescue program are increasing lending.
 
The flurry of activity comes in the wake of President George W Bush’s decision Monday to act on Obama’s behalf by asking Congress to release the remaining $350 billion in the rescue package. Bush administration use of the first half of the massive fund has been roundly criticized by lawmakers in both parties as unfocused, poorly accounted for and not transparent.
 
If the Senate approves release of the second half of the TARP fund, it would become available to Obama shortly after he takes office next Tuesday.
 
The request reached Congress as lawmakers and Obama also were assembling a spending and tax-cutting stimulus package of $800 billion, or possibly more.
 
Federal Reserve Chairman Ben Bernanke said Obama’s $800 billion stimulus package could provide a “significant boost” to the sinking economy. But he warned in a speech at the London School of Economics that such a recovery won’t last unless other steps are taken to stabilize the shaky financial system.
 
Although Bernanke has previously endorsed the notion for a fresh round of government stimulus to lift the country out of recession, it marked the first time the Fed chief has referenced the roughly $800 billion recovery plan now being worked on by Obama.
 
If he succeeds, Obama would have more than $1.1 trillion at his disposal to tackle sinking employment and clogged credit within weeks of assuming the presidency.
 

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2 Comments

• 

  rajakumar at 03:06 AM JST - 15th January

  Is bail outs,they way to for the future. How many bailouts will be enough.

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  rajakumar at 03:08 AM JST - 15th January

  corrections- Is bailouts,the way to the future.

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