Obama Budget Has $250 Bln More For Financ. Rescue

Obama, who will unveil his first budget on Thursday, has left room to ask Congress for more money to stem turmoil in the banking system.

President Barack Obama's budget pencils in the possibility that he may request an additional $250 billion to help fix the trouble U.S. financial system, two senior administration officials said.

Obama, who will unveil his first budget on Thursday, has left room to ask Congress for more money to stem turmoil in the banking system that has contributed to a deteriorating economic picture.

Any additional request to Congress would come on top of the $700 billion financial bailout program that was enacted last year to deal with the overhang of bad mortgage debt that is hindering banks' ability to lend.

The administration officials, who spoke on condition of anonymity, emphasized that no decision has been made about whether to make a formal request to Congress for more money or how much Obama might seek.

One official said the $250 billion was put in the budget in the interests of "honest accounting" and is "nothing other than a placeholder should legislative action be necessary."

The official said that if the government were to spend $250 billion to inject money into the banking system, that would finance about $750 billion in asset purchases.

The bailout has proven to be highly unpopular with many Americans who see it as rescuing Wall Street bankers and others who made risky bets on the mortgage market.

Obama said in a major speech to Congress on Tuesday night that cleaning up the bad debt will cost the federal government "probably more than we've already set aside."