WASHINGTON -- President George W. Bush has made no decision yet on whether to ask Congress to release the second half of the $700 billion of funds it approved to stabilize U.S. financial institutions, but it will likely be needed by February, the White House said on Monday.
U.S. Treasury Secretary Henry Paulson called on Friday for Congress to release the second $350 billion of the Troubled Asset Relief Funds after Bush announced a decision to use some of the money as emergency loans to ailing U.S. automakers.
The first $350 billion was virtually exhausted before Bush announced the decision to loan $17.4 billion to carmakers in an effort to stave off a collapse that would have cost hundreds of thousands of jobs.
"I think that it's clear from the auto loan announcement on Friday that additional funds for TARP (Trouble Assets Relief Program) will be needed as early as February," White House spokesman Tony Fratto said. "And so it's possible that we could be the ones to ask for it and it's possible the next administration. But no decision has been made on that."
"The president will make a decision based on what the needs of the program are and what he's hearing from Secretary (Henry) Paulson and what they need going forward," he said.
Fratto declined to speculate on what might prompt the Bush administration to request the additional funds, rather than leaving that decision to the incoming administration of President-elect Barack Obama. He said the Treasury Department was monitoring markets to ensure they were functioning correctly and had adequate liquidity.
"If the Treasury secretary determined that he had an immediate need for it (the additional $350 billion), he wouldn't hesitate to come to the White House and ask the president to request that authority from Congress," Fratto said.
He said some funds for financial institutions had been committed but not yet released. "Certainly the funds for the American automakers have been committed. They haven't been released yet either," Fratto said.
Paulson's call for the release of additional funds on Friday was not a formal request.
Some members of Congress have said if the administration seeks the second half of the TARP funds, they will attach conditions to ensure that some of it is used as direct help for struggling homeowners rather than going to companies.
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