Sen. Reid awaits word on bank bailout fund

WASHINGTON (Reuters) - Senate Majority Leader Harry Reid said on Tuesday he was awaiting word from the White House on whether it intends to tap into the remaining $350 billion to rescue the financial industry.

Speaking on the Senate floor, Reid, a Nevada Democrat, said he hoped the Senate could soon consider an auto industry bailout bill.

"And then we have to wait for the White House to determine what, if anything, they're going to do with requesting the other money from ... TARP," Reid said. "That decision has not been made yet."

TARP, the Troubled Asset Relief Plan, was enacted in October and provided up to $700 billion for rescuing U.S. financial firms. But before the second half of the money can be used by the Treasury Department, the Bush administration has to notify Congress, which could move to block the money.

A House Democratic leadership aide said there was no indication from the White House it was about to seek the release of the $350 billion. And a senior House Republican lawmaker told Reuters: "It would be very problematic asking for the $350 billion."

Republicans were deeply divided over whether to support the measure when Congress debated it in September and October. The huge amount of taxpayer money it involved, along with the sinking U.S. economy, played a large role in the November 4 elections in which Republicans fared poorly.

The timing of House and Senate votes on a $15 billion auto industry bailout, which also is controversial, could depend in part on the Bush administration's decision on whether to put in play the rest of the financial industry bailout money this week.

The Bush administration's position on the second $350- billion installment had been to let President-elect Barack Obama handle it when he takes office on January 20. But that stance may be shifting.

Republican leaders in the House of Representatives have struck a tone of resistance to releasing more bailout funds.

They sent a letter to Paulson and Federal Reserve Chairman Ben Bernanke last week demanding more information on the TARP before the rest of the money is let go.

An Obama aide said last week that Paulson was weighing whether to ask Congress for the remaining $350 billion of the financial bailout fund, with White House aides approaching Obama's transition team about the idea.

(Editing by Andre Grenon)