President-elect Barack Obama said today he had requested access to the remaining $350 billion of the $700 billion financial industry bailout package so he would have "ammunition" if the US financial system weakens further.
Mr Obama, who takes office next Tuesday, said his White House would focus the rescue funds on housing foreclosures and small businesses, representing a fundamental change from president George W. Bush's use of the first half of the money.
"It is clear that the financial system, although improved from where it was in September, is still fragile," Mr Obama told reporters, when explaining why he had sought the second half of the bailout package now.
"I felt that it would be irresponsible for me, with the first $350 billion already spent, to enter into the administration without any potential ammunition should there be some sort of emergency or a weakening of the financial system."
Mr Obama, earlier today asked president Bush to seek access to the funds from Congress. Mr Obama said he shared the concern of Congressional leaders about how the first half of the package had been spent.
"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 with respect to areas like housing," he told reporters, speaking after a meeting with Mexican president Felipe Calderon.
"My commitment is that we are going to fundamentally change some of the practices in using this next phase of the program. We're going to focus on housing foreclosures, we're going to focus on small businesses, we're going to focus on what's required to make sure that credit is flowing to consumers and businesses," he said.
The massive bailout was approved last October to bolster the financial industry and unfreeze credit as the sector reeled under the stress of toxic mortgage-related assets.
Reuters