Bush, Obama work on bailout funds release

WASHINGTON, Jan. 9 (UPI) -- Bush administration and Obama transition officials are working to get the remainder of a $700 billion U.S. financial rescue package released, officials said.

Citing three sources familiar with the plan, The Washington Post reported Friday that senior Bush administration officials plan to ask Congress for the second half of the rescue package. If Congress rejects the request, President George W. Bush would use the veto to get the funds released.

The plan is being coordinated with President-elect Barack Obama's transition team, the report said.

The legislation Congress approved in October establishing the rescue package requires Congress to approve administration requests for access to the second installment of $350 billion. The president could veto a congressional resolution rejecting a request for release of funds.

Members of Congress have complained about how Bush administration officials spent the first $350 billion and have held up releasing the second $350 billion.

Obama's economic team has begun broadening the scope of the financial rescue package, people familiar with the effort told the Post. Led by Treasury Secretary-nominee Timothy Geithner, the overhaul would expand the program's aid to local governments, small businesses, homeowners and other consumers, the newspaper said Friday.

Much of the work by Obama's team focused on establishing principles that define the program's course and conditions of government aid to financial firms.

Geithner's revisions come as a congressional oversight panel was scheduled to release a report criticizing Treasury Department officials for their handling of the financial rescue, The New York Times said. A draft of the report obtained by the newspaper chastised the Treasury for not properly measuring the program's success and for taking "no steps to use any of this money to alleviate the foreclosure crisis."

The draft also ripped the Treasury Department's "shifting explanations" about the purpose for the bailout and its failure to answer many of the panel's questions.

The Treasury declined to comment on the panel's findings, the Times said.