Obama: $350b bailout needs to help people

President-elect Barack Obama wants more transparency and strict guidelines for using the second $350 billion of the bailout fund Congress approved last fall to stabilize the nation's financial system.

Obama's economic team has been talking with the Bush administration about having Treasury Secretary Henry Paulson ask Congress as early as this week for access to the $350 billion remaining in the bailout fund. If Congress rejected such a request, a presidential veto could still free up the money, unless Congress overrode the veto.

The Congressional Oversight Panel raised detailed questions last week about how banks are spending the first $350 billion, how the money will combat the rising tide of home foreclosures and Treasury's overall strategy for the rescue. In instance after instance, the panel said, the Treasury Department did not offer adequate responses.

In an interview aired Sunday, Obama declined to say whether he wants President George W. Bush to request the rest of the money, but he said he has asked his economic team to develop a set of principles to ensure more openness about how the money is spent and to focus on using it more to help homeowners and small businesses.

"Let's lay out very specifically some of the things that we are going to do with the next $350 billion of money," Obama said on ABC's "This Week." "And I think that we can regain the confidence of both Congress and the American people that this is not just money that is being given to banks without any strings attached and nobody knows what happens, but rather that it is targeted very specifically at getting credit flowing again to businesses and families."

Among the things under consideration by Obama aides and congressional Democrats are limiting executive pay at institutions that receive the money and forcing such institutions to get rid of any private aircraft they may own or lease.

"I think that when you look at how we have handled the home foreclosure situation and whether we've done enough in terms of helping families on the ground who may have lost their homes because they lost their jobs or because they got sick, we haven't done enough there," Obama said.

In the interview taped Saturday, Obama also conceded it will be difficult to enforce his pledge to ban congressionally earmarked projects from the nearly $800 billion economic stimulus plan he's negotiating with Congress.

"In a package of this magnitude, will there end up being certain projects that potentially don't meet that criteria of helping on health care, energy or education? Certainly," he said.

But Obama said inaction carries too great a risk. "We can't afford three, four, five, six more months where we're losing half a million jobs per month. And the estimates are that if we don't do anything, we could see 4 million jobs lost this year."

Vice President Dick Cheney said the administration's bailout program has had "significant positive impact" by guaranteeing liquidity in the financial system and adequate capital in the banking system. Although such intervention goes against conservative principles, Cheney said, the financial system is the federal government's responsibility and is under threat from the economic crisis.

"I would rather see a smaller government. But we've always said, and I firmly believe, that you do make exceptions for budget restraint. And those exceptions are wars, for example, national crises," Cheney said in an interview aired Sunday on CNN's "Late Edition."

"So there have been reasons why we've had to commit those funds and run up the deficit. I'd rather it hadn't been necessary, but I do think it was necessary, given the problems we're faced with," he said.

Obama, who has been receiving daily national security briefings since his election in November, acknowledged that his campaign pledge to close the prison at Guantanamo Bay will be more of a challenge than he anticipated. Many of those held at the military site are suspected terrorists or potential witnesses in cases against them.

"It is more difficult than I think a lot of people realize - and we are going to get it done - but part of the challenge that you have is that you have a bunch of folks that have been detained, many of whom who may be very dangerous who have not been put on trial or have not gone through some adjudication," he said.

The president-elect said that while some evidence against terrorism suspects may be tainted by the tactics used to obtain it, that doesn't change the fact they are "people who are intent on blowing us up."

Speaking in general terms, Obama said the country had made progress in becoming safer since the Sept. 11 attacks, but dangers persist. He said national security remains a concern, but added: "We know exactly what they're planning, where they're positioned. If you have a small group of people in today's world with today's technology who are intent on doing harm and are willing to die, that is something that's always going to be a challenge."

In other matters:

-Obama predicted his choice for attorney general, Eric Holder, would pass Senate confirmation despite worries about his ties to President Bill Clinton's controversial pardon of Marc Rich.

-Obama and wife Michelle are still visiting Washington-area churches looking for a new place to worship. The Obamas resigned from Chicago's Trinity United Church of Christ after sermons from the Rev. Jeremiah Wright caused an uproar for blaming the United States for the Sept. 11 attacks.

-The Obamas are deciding between a labradoodle or a Portuguese water hound puppy, in the search for an appropriate pet for their daughters, ages 7 and 10. Obama said they're ready to start visiting shelters.

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