Bailout funds stir new debate

WASHINGTON, Jan. 15 (UPI) -- Fourth quarter bank losses may require the U.S. government to go beyond the $700 financial bailout package, Federal Reserve officials said this week.

Analysts expect Citigroup Inc. to report a $3 billion loss in the fourth quarter, The Washington Post reported Thursday.

J.P. Morgan Chase and Bank of America are struggling with acquisitions more financially stressed than previously thought and Goldman Sachs analysts said banks still need to raise hundreds of billions to survive.

As lawmakers in Washington debate the issue of releasing the second $350 billion of the approved $700 billion, Fed officials have urged the bulk of the funds be reserved for financial firms. By tapping into a portion of the bailout the decision to help U.S. automakers in December turned the second half of the program into "$350 billion slush fund," said Sen. Bob Corker, R-Tenn.

Both Republicans and Democrats have issues with how the first half of the package was handled by the Bush administration, but Republicans are putting up resistance to President-elect Barack Obama's intent to help more homeowners and struggling small businesses, the Post said.

Some say the standoff may result in an early presidential veto, the Post said.