WASHINGTON — In formally asking Monday for the release of the second half of the $700-billion financial bailout fund, President-elect Barack Obama is promising Congress he will do a better job than President Bush in using the money to help average Americans.
"We're going to focus on housing and foreclosures. We're going to focus on small businesses," Obama told reporters Monday. "We're going to focus on what's required to make sure that credit is flowing to consumers and businesses to create jobs in the United States."
But first Obama must focus on smoothing over strong resentment on Capitol Hill about the Troubled Asset Relief Program, or TARP. Many Democrats and Republicans say they were misled by Treasury Secretary Henry M. Paulson about how the first $350 billion would be spent. Democrats are particularly angry that none of the money has gone to help homeowners facing foreclosure.
"People feel they got burned up here by the current administration," said Senate Budget Committee Chairman Kent Conrad (D-N.D.). "I understand the need for the money to be released. I also feel very strongly it's got to be conditioned in a way to avoid what I see are the abuses by the administration in the handling of the first" half.
The Democratic-controlled Congress is unlikely to block the request. But Obama is seeking to avoid a confrontation over economic recovery spending that could spill into his push for a roughly $800-billion stimulus package.
Lawrence H. Summers, whom Obama has chosen to head his National Economic Council, promised in a three-page letter to congressional leaders Monday that the new administration would "act both quickly and wisely." He broadly outlined the changes that Obama was planning for the second part of the fund, including more transparency in how the money is spent and "a sweeping effort" to reduce foreclosures.
"We cannot allow the failures of the past to prevent us from doing what we must to secure America's future," Summers wrote to House Speaker Nancy Pelosi (D-San Francisco), House Minority Leader John A. Boehner (R-Ohio), Senate Majority Leader Harry Reid (D-Nev.) and Senate Minority Leader Mitch McConnell (R-Ky.)
Obama worked behind the scenes to soothe lawmakers. On Monday morning, for example, he twice phoned Sen. Barbara Boxer (D-Calif.), who does not even serve on any of the relevant committees. Boxer, like many senators and representatives, has been upset with the bailout fund's administration.
