US President-elect Barack Obama has asked for access to the remaining $350 billion of the $700 billion earmarked for a bail-out of the US financial industry. He said he wanted to have 'ammunition' if the US financial system weakened further.
Speaking to reporters after a meeting with Mexican President Felipe Calderon, Obama said his White House would focus the rescue funds on mortgage holders and small businesses. This represents a fundamental change from President George Bush's use of the first half of the money.
Earlier, President Bush said he would be willing to ask the US Congress for the remaining $350 billion, but added that Mr Obama had not asked him to do so.
Aides to Obama, who takes office on January 20, had been in discussions with the White House and Congress on seeking to use the remaining funds from the bail-out. The money was approved last year and is aimed at shoring up the troubled financial sector.
But many lawmakers have criticised the Bush administration over how the first $350 billion of the fund was used.
Several Democrats in the Senate have demanded that the remaining money from the Troubled Asset Relief Program, or TARP, be released only if stronger limits and protections are adopted.
The TARP programme has mainly been used to give banks fresh capital so they can return to normal lending after a credit squeeze triggered by toxic mortgage-related assets. But Obama and his fellow Democrats in Congress want more of the fund to go directly to consumers struggling with a wave of home foreclosures.
To get access to the remaining $350 billion, the president must tell lawmakers he intends to tap the funds and Congress would have 15 days to consider the issue.
Meanwhile, President Bush defended his administration's response to the economic crisis, saying that the markets were starting to thaw. 'Credit spreads are beginning to shrink, lending is just beginning to pick up,' he said.
