Ensign calls for restraint on bailout funds

WASHINGTON -- Rather than approve billions of dollars in new spending to stimulate the economy, Congress should use money that has not yet been spent from a $700 billion financial bailout bill that passed in October, Sen. John Ensign said Monday.

Almost $350 billion from the Troubled Assets Relief Program remains unspent after the Bush administration tapped into the fund to inject capital into banks, to support mortgage lenders Fannie Mae and Freddie Mac, and to bail out the AIG insurance company.

Treasury Secretary Henry Paulson said Monday the administration was working on new programs to stimulate lending.

The Treasury Department must get permission from Congress before it can access the remaining $350 billion. Ensign, R-Nev., said congressional leaders should consult with Paulson about diverting some of that money into stimulus efforts.

"I am very, very concerned about the deficit," Ensign said. "You cannot just spend money like crazy out there. We should at least take a look at the $350 billion."

Ensign said at least some amount should pay for tax breaks to stimulate the economy, including a $15,000 tax credit for new home buyers.

Congress considered that earlier this year, but settled on a tax break that amounted to an interest-free loan up to $7,500.

Democrats are forming legislation that could include spending to rebuild roads and bridges, and for new renewable energy projects, on the grounds that such infrastructure spending creates jobs.

Governors also have lobbied for federal spending to help states meet health care obligations through the Medicaid program, and also more assistance to unemployed workers who have yet to find new jobs.

Senate Majority Leader Harry Reid of Nevada last week estimated the price tag of a new stimulus bill could reach about $500 billion, and that Congress would likely pass it soon after President-elect Barack Obama takes office.