Congress gets bail-out request

President Bush has asked Congress to release the remaining $350bn (£236bn) of US financial bail-out funds after a request from Barack Obama.

There is strong opposition in Congress to releasing the money with the House of Representatives and the Senate considering blocking the move.

But funds would be likely to remain available because any disapproval could be vetoed by President Bush.

But observers say if the payout was rejected, it could aggravate markets.

There have been hopes that if the final tranche of the bail-out was approved, it would give a strong start to Mr Obama’s efforts to fighting the financial crisis when he takes office next week.

The president-elect’s team have been trying to douse opposition to the payment of the rest of the funds agreed last year under the Troubled Asset Relief Program (Tarp).

“I called President Bush to trigger the second half of what’s known as the Tarp, that’s related to financial rescue,” said Mr Obama.

“I did so because in consultation with the business community and my top economic advisers, it is clear that the financial system, although improved from where it was in September, is still fragile.”

The White House said that President Bush had formally requested on Monday evening that Congress release the remaining pledged capital.

‘Rules needed’

The US House of Representatives passed the $700bn government plan to rescue the US financial sector in October last year – having rejected an earlier version of it which hammered global stock markets.

The package was aimed at buying up the bad debts of failing financial institutions on Wall Street.

The Treasury Department, which is managing the Tarp, has already committed the first half of it – mainly to capital injections into troubled banks, but many Congress members are unhappy with how it has been handled.

US Democratic congressman Barney Frank said that he and Mr Obama agreed that new rules were needed to govern how the next $350bn was disbursed – but said he wanted these written into law.

Carmakers and even leading figures of the pornography industry have argued that they should be given access to the cash which was earmarked for financial institutions.

Source: BBC

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