Bush officially request rescue plan's second $350bn

President Bush and his successor Barack Obama today asked Congress to release the second $350bn (€262bn) in a rescue plan to prop up the troubled US financial system.

Mr Bush acted on a request from Mr Obama, who takes office next week, to get the remainder of last year’s bailout scheme into action..

It is separate from Mr Obama’s plan for roughly $800bn (€600bn) dollars in spending and tax breaks to spur the economy.

Mr Bush issued the formal request shortly after his final White House news conference.

The Obama economic team has been working with Congress to help smooth release of the massive block of federal dollars, suggesting it wanted to use more of the fund to relieve homeowners threatened with mortgage foreclosures.

The request was likely to force a vote within days on whether to block the funding, but the deck is stacked in favour of Mr Bush and Mr Obama winning release of the remaining money. Congress can pass a resolution disapproving the request, but the White House could veto the resolution; then, just one-third of either chamber would be needed to uphold the veto and win release of the money.

The idea is to make the money available to the new administration shortly after Mr Obama takes office January 20. The unpopular bailout deal has featured unconditional infusions of money into financial institutions that have done little to account for it.

Treasury Secretary Henry Paulson originally promised the money would be used to buy up toxic mortgage-related securities whose falling values have clogged credit markets and brought many financial institutions to the brink of failure.

Work continued through the weekend on Mr Obama’s economic recovery plan, which features aid to cash-strapped state governments, tax cuts for most workers and working couples, a huge spending package blending old-fashioned public works projects with aid to the poor and unemployed, and a variety of other initiatives.