Obama wants access to remaining bailout money

Barack Obama's economic team is talking with the Bush administration about having Treasury Secretary Henry Paulson ask Congress within the next week for access to the $350 billion remaining in the financial bailout fund, officials on both sides said Friday.

A request by Paulson would allow Obama to begin tapping the fund — the last half of a $700 billion rescue package authorized by Congress in October — promptly after his Jan. 20 inauguration.

Obama's transition team also has asked Neel Kashkari, the head of the rescue program at the Treasury Department, to stay on for "a couple of weeks" under the new Obama administration to ensure a smooth transition, an Obama official said.

Paulson has said for a number of weeks that he has been having talks with the Obama team on when a request should be presented to Congress seeking the second $350 billion. He has said that the decision on timing has been left up to the incoming administration.

Eager to shift the course of the government's financial sector bailout fund, Obama and congressional Democrats want a more defined mission for the beleaguered $700 billion rescue program.

The House could act as early as next week on a new tack for the Troubled Asset Relief Program that would set tougher conditions on recipients of the money, including limits on executive pay, and require the Treasury Department to use some of the money to reduce mortgage foreclosures.

At the same time, Obama's selection for treasury secretary, Timothy Geithner, is broadening the program's goals, aiming to unfreeze credit for homeowners, consumers, small businesses and local governments.

Geithner and Obama's economic team are developing a "comprehensive set of investment principles" that would also embrace restrictions on how the money is spent, limits on executive compensation for fund recipients and a plan to address rising foreclosures, an Obama transition official said.

The changes come amid bipartisan criticism that the Bush administration's handling of the first $350 billion of the program has been unfocused, confusing and inconsistent. But the new approach also signals a significantly greater government intrusion into the workings of financial institutions than the Bush administration was willing to undertake.

The money so far has been used to support ailing companies such as insurance giant American International Group Inc. and automakers General Motors Corp. and Chrysler LLC. It also has pumped billions of dollars into banks in hopes of freeing up credit for loans. But critics have complained that the money has had few strings attached and has not been used effectively to address the nation's housing cris