President-elect Barack Obama on Monday asked the outgoing administration of President George W. Bush to request that Congress release the second half of the $700 billion financial relief fund and promised lawmakers that he would step up oversight of the program as the remaining money is distributed.
The White House confirmed that Obama has asked President Bush to formally request Congressional approval of the use of the funds and noted that the president has agreed to comply, as Bush himself promised to do earlier that morning.
Meanwhile, one of Obama's top economic advisers sent a letter to leading lawmakers pledging to increase transparency for the bailout fund if the second tranche is released.
"President-elect Obama believes there has been too little transparency and accountability," Lawrence Summers, Obama's pick to head the Council of Economic Advisers for the incoming administration, noted in a letter to the top Democrat and Republican leaders in both the House and Senate.
The letter noted that the distribution of the bailout funds have included "too much upside for financial institutions and executives who acted irresponsibly without providing enough help for small business owners, families who are struggling to keep their jobs and make ends meet, and innocent homeowners."
Last October, Congress approved the controversial financial bailout package, which created the $700 billion Troubled Asset Relief Program, or TARP. Since it was first approved, there has been criticism about how the first half of the money has been spent and many lawmakers are still uncertain about the concept of the bailout fund at all.
Most of the first $350 billion has been used to buy equity stakes in banks to prop up their capital position in an attempt to get the financial institutions back to normal lending practices. But many lawmakers feel the banks have been slow to lend out the money, instead slating the funds for use in acquiring other banks.
Last week, the chairman of the powerful House Financial Services Committee released the draft of a bill meant to tighten the oversight of the TARP. The proposed law included new requirements about what the money could be used for and forced companies receiving the funds to agree to certain restrictions, like limits on executive compensation and a provision making the companies get rid of their corporate jets.
The bill would also set aside part of the second $350 billion for use in avoiding home foreclosures, a key part of the initial bailout for many lawmakers that has been largely ignored in the distribution of the first half of the money.
The letter from the Obama camp echoed many of these ideas, calling for limits on executive compensation and on dividend payments to shareholders, as well as restrictions on acquisition activity.
Obama would also look to improve reporting and transparency, the letter said, including details about how the initial $350 billion has been distributed.
Speaking at a press conference before receiving the request from the Obama camp, President Bush said he would ask Congress for the second half of the TARP funds if Obama thought it was necessary.
At the press conference, slated to the be the last of Bush's presidency, the outgoing president noted the actions that his administration has begun, including the TARP, are beginning to thaw credit markets, which Bush called "the first step toward recovery."
For comments and feedback contact: editorial@rttnews.com
May 22, 2026 14:46 ET Minutes of the latest Fed policy session was the highlight of the week along with survey data on the U.S. housing market. In Europe, survey data signaled the trends in the euro area private sector. Further, consumer price inflation data from the U.K. was in focus. In Asia, various economic indicators from China drew attention to the health of the economy.