The Auto Bailout: Paulson Wants Rest of TARP Funds From Congress --- Request After Auto Bailout Leads to Uncertainty Over How and When the Second $350 Billion Tranche Will Be Accessed
WASHINGTON -- The U.S. government's rescue of the auto industry drained what remained in the first half of Treasury's $700 billion bailout fund, prompting Treasury Secretary Henry Paulson to call on Congress to release the rest of the money.</br></br>The move sets off a period of uncertainty for financial markets as the Bush administration and the Obama team scramble to determine how to proceed.</br></br>On Friday, Mr. Paulson said lawmakers should release the second $350 billion "to support financial market stability." He said he would discuss tapping the money "in the near future" with congressional leaders and members of President-elect Barack Obama's transition team.</br></br>Draining the current bailout fund raises the question of how the administration would handle an unexpected fiscal emergency. Mr. Paulson said in a statement Friday that Treasury, along with the Federal Reserve and the Federal Deposit Insurance Corp., has "the necessary resources to address a significant financial market event." While the first $350 billion has been allocated, not all of the money has been spent and Treasury could dip into the unused funds.</br></br>Mr. Paulson has not decided whether to formally request the second half of the Troubled Asset Relief Program -- known as TARP -- or leave that task to the Obama administration, according to people familiar with the matter. The White House suggested it may not make any requests before President George W. Bush leaves office, according to Deputy Chief of Staff Joel Kaplan.