Uphill climb seen for bailout funds in Senate

WASHINGTON (Reuters) - A White House request for access to the final half of funding for the $700 billion federal financial industry bailout program faces an uphill climb in the Senate, senior U.S. senators from both political parties said on Tuesday.

Winning release of the money is “going to be a challenge because many who voted for TARP the first time are skeptical,” Illinois Sen. Richard Durbin, the Senate’s No. 2 Democrat, said of the Treasury Department’s Troubled Asset Relief Program (TARP).

President-elect Barack Obama is scheduled to speak to his former Senate colleagues at a lunch on Tuesday to urge them to release the final $350 billion for the bailout to help U.S. banks and financial services companies.

“The president-elect’s appearance today ... is going to be an important part of it,” Durbin said. “I’ll know a little bit more after the president-elect speaks.”

Utah Republican Sen. Orrin Hatch told Reuters there likely are enough Senate votes to approve a resolution rejecting the funding request. “I think they have the votes to do that. ... There’s a lot of upset about this,” Hatch said.

The first $350 billion for TARP was approved in October, but lawmakers from both political parties have criticized the Treasury Department’s oversight of the program.

President George W. Bush on Monday formally asked Congress for access to the second half of TARP funding on behalf of Obama, who will be sworn in next Tuesday.

Motions to disapprove the final TARP funding were filed in the Senate by Republican David Vitter of Louisiana and in the House by Republican Virginia Foxx of North Carolina.

Sen. Lamar Alexander of Tennessee, a member of the Republican leadership, said on Tuesday it was unclear if Congress would or could pass the resolutions. If Congress did so, it was unclear whether opponents could muster the two-thirds majority that would be needed in both chambers to override an expected presidential veto of such a motion.

“It’s a high hurdle to clear,” Alexander told Reuters.

Additional reporting by Thomas Ferraro; Editing by Brian Moss