Obama may have to expand bailout funds: Media

WASHINGTON: President Barack Obama may have to ask for more funds to shore up the country's troubled financial system, beyond the 700 billion dollars already approved by Congress for the rescue, the Washington Post reported Saturday, citing lawmakers and economists.

With banks unable to stem trillions of dollars in losses on bad mortgages and other assets, the fund set up to stop the financial meltdown -- Troubled Assets Relief Program (TARP) -- may need a fresh injection of cash, the Post wrote.

"I don't think many people at the top of the Treasury or the Fed thinks this is the last amount of money they're going to need to deploy," said Representative Barney Frank, the senior Democrat who leads the House Financial Services Committee.

The total cost of the bailout could exceed one trillion dollars, the paper said.





Congress has backed 700 billion for the bailout, with the second half of the fund approved just days before Obama was sworn in as the new president.

Obama has promised to devote about 50 billion of the remaining money to help homeowners avoid foreclosure, but prominent economists told Democratic senators at a meeting on Thursday that the cost of that initiative alone could rise to 250 billion, according to the Post.

Amid forecasts the economic turmoil will require more spending, some lawmakers are calling for Obama to decide soon on the total amount for the financial bailout, the paper said.

Separately from the rescue program, Obama has proposed a 825 billion stimulus package to help create or save jobs and improve the country's infrastructure.