Obama may call for more funds
President-elect Barack Obama was considering on Sunday whether to have the Bush administration inform the U.S. Congress that the Treasury Department planned to tap the final half of the government's $700 billion financial rescue fund.
Congress approved the program in early October, but it granted access to only half of the funds.
Before the Treasury can draw on the final $350 billion, the administration must inform Congress of its intention to do so. Lawmakers would then have 15 days during which they could block access to the funds.
The Treasury Department has already disbursed $251.5 billion from the fund and has made further pledges that would take the total to $354.4 billion.
Following is an outline of what has been spent or pledged from the funds the Treasury can currently tap. For details, see: www.treas.gov/initiatives/eesa/transactions.shtml
— $250 billion has been pledged for purchases of senior preferred shares and warrants in banks and thrifts; other commitments could force the Treasury to scale this back.
In its latest report, which covered transactions through Jan. 2, the Treasury said it had completed equity purchases totaling $177.5 billion under this portion of the program. A further $10 billion is approved for Merrill Lynch <MER.N> but has been deferred pending its merger with Bank of America <BAC.N>.
— $40 billion investment in troubled insurer American International Group.
— $20 billion investment in Citigroup.
— $19.4 billion to prop up the U.S. auto industry. The amount includes $10.4 billion in loans to General Motors Corp, including $1 billion for GM to help its financing affiliate GMAC reorganize as a bank holding company; a $4 billion loan for Chrysler LLC; and a $5 billion direct investment in GMAC. GM could qualify for a further $4 billion loan in March, but that would have to come from the final $350 billion tranche of the financial rescue fund.
— $5 billion pledged to cover potential losses on a portfolio of Citigroup mortgage-related assets.
— $20 billion pledged to cover potential losses for a Federal Reserve program aimed at improving consumer access to credit.
