January 11, 2009 / 12:05 PM / in 9 years

Obama: Financial bailout program needs overhaul

3 Min Read

<p>President-elect Barack Obama waves to supporters as he leaves the Presidential Inaugural Committee offices in Washington, January 8, 2009.Jim Young</p>

WASHINGTON (Reuters) - President-elect Barack Obama urged a revamping of the government's $700 billion financial bailout, saying in an interview broadcast on Sunday it had to increase the flow of credit to families and businesses.

"I, like many, are disappointed with how the whole TARP process has unfolded," Obama said, referring to the Troubled Asset Relief Program.

"There hasn't been enough oversight," Obama said in an interview on ABC's "This Week with George Stephanopoulos." "We found out this week in a report that we are not tracking where this money is going."

Stephanopoulos pressed Obama on whether he wanted U.S. President George W. Bush to request permission from Congress to use the second half of the bailout funds.

Obama, who takes over from Bush on January 20, did not answer directly but said he wanted to see the program changed to do more to help families stave off foreclosures and to increase the flow of credit for small businesses.

"What I've done is asked my team to come together, come up with a set of principles around how we are going to maintain transparency, what are we going to do in terms of housing, how are we going to target small businesses that are under an enormous business crunch?" Obama said.

The White House said on Friday that Bush administration officials were in discussions with the Obama team on the possibility of Bush making a request for the second $350 billion of the bailout funds.

Both the White House and an Obama transition official said no final decision had been made but The Washington Post said a request could come as early as this weekend.

The aim would be to ensure that the funds were in place on January 20, when Obama takes office.

The program, which has used mainly to bail out financial firms, is unpopular on Capitol Hill. Some of the funds also were used to help distressed U.S. automakers.

Obama said his team plans to "lay out very specifically some of the things that we are going to do with the next $350 billion of money."

"And I think that we can gain -- regain the confidence of both Congress and the American people that this is not just money that is being given to banks without any strings attached," Obama said.

Reporting by Caren Bohan; Editing by Bill Trott

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