Senate approves release of $350bn in bailout funds

CONGRESS laid the foundation for US president-elect Barack Obama’s economic recovery plan yesterday with remarkable speed, clearing the way for a new infusion of bailout cash for the financial industry while majority Democrats proposed spending increases and tax cuts totalling a whopping $825 billion (€630bn).

Two days after Obama personally lobbied for release of $350bn in bailout funds, the Senate narrowly turned aside a bid to block the money.

Across the capitol, House Speaker Nancy Pelosi said: “Immediate job creation and then continuing job creation” were the twin goals of the separate stimulus legislation.

It recommends tax cuts for businesses and individuals while pouring money into areas such as health care, education, energy and highway construction.

She and Senate majority leader Harry Reid, have pledged to have the economic stimulus bill ready for Obama’s signature by mid-February.

Both houses debated Obama’s call to release another $350bn from the financial bailout package, but the vote that mattered most was in the Senate.

Despite bipartisan anger over the Bush administration’s handling of the programme to date, Democratic allies of the incoming president prevailed on a vote of 52-42 that will permit the release of funds within days of Obama’s inauguration.

The vote followed a commitment by Obama to use as much as $100bn of the money to help homeowners facing foreclosure.

Separately yesterday, Roland Burris took his place as Barack Obama’s successor in the Senate yesterday, ending a standoff that embarrassed the president-elect and fellow Democrats who initially resisted the appointment by scandal-scarred Illinois governor Rod Blagojevich.