The president-elect asks President Bush to tell Congress he seeks access to $350 billion in remaining bailout funds.
NEW YORK -- President-elect Barack Obama is asking Congress for access to $350 billion in remaining federal bailout funds, the White House said Monday.
Obama asked President Bush to notify Congress of Obama's intent to use the remaining balance under the Treasury Department's $700 billion Troubled Asset Relief Program, or TARP, according to the White House press office.
"This morning, President-elect Obama asked President Bush to formally notify Congress, on his behalf, of his intent to exercise the authority under the Emergency Economic Stabilization Act to access the last tranche of $350 billion in funding for Treasury programs addressing the financial crisis," Bush spokeswoman Dana Perino said in a statement.
"President Bush agreed to the President-elect's request. We will continue our consultations with the President-elect's transition team, and with Congress, on how best to proceed in accordance with the requirements of the statute," Perino added.
A Democratic source in Congress had told CNN this weekend that the Bush administration may soon request the funds.
News that Obama was seeking the funds came just hours after Bush, speaking at his last regular White House press conference, said Obama hadn't made any request for the funds.
"I told him that if he felt he needed the $350 billion, I would be willing to ask for it," Bush said Monday. But Obama "hasn't asked me to make the request," Bush told reporters.
Under the bailout legislation approved by Congress in October, the administration must formally notify Congress that it wants to access the second installment of $350 billion. Unless Congress passes a resolution rejecting the request within 15 days, Treasury can begin tapping the funds.
Even with the news that Bush will request the funds, the money won't be available until the Obama administration is in office. Inauguration Day is Jan. 20.
How the new administration plans to spend the second half of the TARP funding has emerged as a major issue on Capitol Hill.
Lawmakers on both sides of the aisle have expressed unhappiness with the way Treasury Secretary Henry Paulson has used the first $350 billion. They object to how Treasury made direct investments in banks with few strings attached and no process for tracking how the banks are using the money.
Leading Democrats in Congress have made clear that reducing foreclosures will be among their chief priorities for the use of the second half of TARP funds. On Friday, House Financial Services Chairman Barney Frank, D-Mass., introduced a bill that promises $50 billion of foreclosure relief and toughens terms on companies getting taxpayer money.
On Sunday, Senate Democrats met with members of Obama's economic team and emerged optimistic about plans to reshape the rescue of the financial services industry.
"The Obama administration wants to re-brand this process," said Sen. Christopher Dodd, D-Conn., chairman of the Senate Banking Committee. "They realize that if we're going to be effective in assisting our credit markets, to get them unclogged and moving again, this program has to be far better run than it has been."
Despite criticism of how the first half of the TARP money was deployed, Bush defended his administration's approach. He said he was concerned in the fall that the U.S. was headed for an economic meltdown worse than the Great Depression, but now he sees signs that "financial markets are beginning to thaw."CNN senior congressional correspondent Dana Bash, congressional producer Evan Glass and CNNMoney.com senior writer Jeanne Sahadi contributed to this report.