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WASHINGTON (Reuters) – President-elect Barack Obama vowed to restructure a financial rescue plan to save more U.S. families from home foreclosures, as he considered on Sunday whether to seek additional funds from a $700 billion bailout program.

Reuters – President-elect Barack Obama at a news conference in Chicago, December 7, 2008. (Jeff Haynes/Reuters)

Obama's aides have been in discussions with the White House over whether President George W. Bush should ask Congress for permission to use the remaining $350 billion of the funds, which are aimed at stabilizing the financial system.

The purpose of the request, which would be formally submitted by Bush, would be to have the funds in place soon after Obama takes office on January 20.

But it may prove difficult to get approval from Congress because the bailout program is unpopular with many lawmakers who feel too much of the money has already been given to Wall Street firms with few strings attached.

The legislators want some of the remaining money to be used instead to help struggling homeowners.

Massachusetts Sen. John Kerry, after leaving a meeting with other senators and some of Obama's top aides, said the president-elect was close to a decision on the bailout fund, known as the Troubled Asset Relief Program, or TARP.

"It's my understanding that the president-elect is going to make a judgment somewhere in the next hours," Kerry told reporters. "I think the president-elect will make known -- because he's the one who's going to be controlling that -- what he would like to see happen on that."

Top Obama aides Larry Summers and Jason Furman were holding closed-door meetings with Kerry and other senators to discuss, not only the bailout funds but also a proposed $775 billion stimulus package that Obama and the Democrats say is needed to pull the U.S. economy out of a deep slump.

A COLLABORATIVE EFFORT

Senate Democrats said the plan was undergoing changes from an original outline that called for setting aside 40 percent of the money for tax cuts. Much of the rest of the package would go toward public works projects such as road and school construction and social safety-net programs like unemployment insurance.

Some Democrats want to see more energy-related tax breaks and also questioned the structure of some of the tax cuts for families and businesses.

"There are significant changes already being put in place and being contemplated," Kerry said. "I think it's moving in the right direction and I think we're making a lot of progress."

He said he believed there would be changes to the proposed $1,000 tax cut for middle-class families and to the credits aimed at encouraging businesses to hire.

After facing some resistance from Democrats last week on some aspects of the package, Obama emphasized his staff was working closely with the Democratic-led Congress.

"We're going to have a collaborative, consultative process with Congress over the next few days," Obama said in an interview on ABC's "This Week." "We're not trying to jam anything down people's throats."

Government figures last week showed the U.S. unemployment rate surged in December to 7.2 percent, capping a year in which employers slashed 2.6 million jobs, the most since 1945.

Obama says passage of the stimulus plan by mid-February is crucial to avoiding further job losses.

The Obama team sees a reworking of the bailout program as another way to throw the economy a lifeline.

He emphasized in the ABC interview that he agreed with lawmakers' concerns about how the program had been managed.

"When you look at how we have handled the home foreclosure situation and whether we've done enough in terms of helping families ... we haven't done enough there," Obama said.

Congress must give its approval to unlock the rest of the TARP funds and lawmakers who have been skeptical about the program have said they may oppose that.

"Until there is a demonstrated need in our economy and a plan to address that need, I think it would be irresponsible for them to release that money," House Minority Leader John Boehner, an Ohio Republican, told CBS's "Face the Nation".

WASHINGTON – President-elect Barack Obama's proposed tax cuts ran into opposition Thursday from senators in his own party who said they wouldn't do much to stimulate the economy or create jobs. Senators from both parties agreed that Congress should do something to stimulate the economy. But Democratic senators emerging from a private meeting of the Senate Finance Committee criticized business and individual tax cuts in Obama's stimulus plan.

President-elect Barack Obama makes remarks on the nations economy, Thursday, Jan. 8, 2009, at George

They were especially critical of a proposed $3,000 tax credit for companies that hire or retrain workers.

"If I'm a business person, it's unlikely if you give me a several-thousand-dollar credit that I'm going to hire people if I can't sell the products they're producing," said Sen. Kent Conrad, D-N.D., a member of the committee.

"That to me is just misdirected," Conrad said.

Sen John Kerry, D-Mass., said, "I'd rather spend the money on the infrastructure, on direct investment, on energy conversion, on other kinds of things that much more directly, much more rapidly and much more certainly create a real job."

The cost of the economic rescue package Obama wants is expected to swell to $800 billion or more. About $300 billion of Obama's package would be for tax cuts or refunds for individuals and businesses.

One tax provision would provide a $500 tax cut for most workers and $1,000 for couples, at a cost of about $140 billion to $150 billion over two years. The individual tax cuts may be awarded through withholding less from worker paychecks, effectively making them about $10 to $20 larger each week.

Sen. Ron Wyden, D-Ore., said he doubted that a modest tax cut would change consumers' spending habits.

"In tough times people don't respond all that well to marginal changes, such as a small amount of money added per paycheck," Wyden said.

Democratic Sen. Max Baucus of Montana, chairman of the Finance Committee, said he hopes to schedule a committee vote on the stimulus package in about two weeks, which would coincide with the week of Obama's inauguration. Many senators still hope to approve a package by mid-February.

There is "general agreement that because of the recession we've got to move, we've got to move quickly, very quickly," Baucus said.

He added that it is too early to pass judgment on any aspect of Obama's plan.

"This is an early part of this whole process. A lot of preliminary questions are going to be asked," Baucus said.

WASHINGTON – Pointing with concern to "red ink as far as the eye can see," President-elect Barack Obama pledged Wednesday to tackle out-of-control Social Security and Medicare spending and named a special watchdog to clamp down on other federal programs — even as he campaigned anew to spend the largest pile of taxpayer money in history to revive the sinking economy.

AP – President-elect Barack Obama gestures during a news conference at his transition office in Washington,

The steepness of the fiscal mountain he'll face beginning Jan. 20 was underscored by stunning new figures: an estimate that the federal budget deficit will reach $1.2 trillion this year, by far the biggest ever, even without the new stimulus spending.

The incoming president has walked this same tightrope each day this week — advocating fiscal discipline and taxpayer largesse together at nearly every turn, though in every case with little detail to back it up. With less than two weeks to go before taking the helm at the White House, he'll make the same pitch on Thursday, delivering a speech laying out why he wants Congress to quickly pass his still-evolving economic plan.

Last year's U.S. deficit set its own record, but that $455 billion will be dwarfed by this year's. The new estimate, by the nonpartisan Congressional Budget Office, represents more than 8 percent of the entire national economy.

Still, Obama said "an economic situation that is dire" requires immediate and bold action with unprecedented tax cuts and federal programs. More bad news is expected Thursday and Friday on U.S. layoffs, and stocks plummeted anew on Wednesday, wiping out gains from the first week of the new year.

Obama gave his first ballpark estimate of the total amount of the stimulus package expected to emerge from negotiations between his team and Capitol Hill, saying it is likely to hover around $775 billion over two years. That's about $400 billion less than outside economists have said might be needed to jolt the economy but at the top of the range that Obama aides and congressional leaders have discussed publicly.

"We're going to have to jump-start this economy," Obama said. "That's going to cost some money."

The president-elect said concerns about increasing the deficit to unmanageable levels swayed him against the higher figures advocated by some.

House Speaker Nancy Pelosi also pressed for passage of a recovery bill, though the mid-February timeline she offered represented another slip in the date by which the package would be ready for Obama's signature. Initially, the goal was to have it finished by the time he takes office a week from next Tuesday.

Obama's repeated emphasis amid the stimulus talk on a need for spending control is aimed in part at attracting more support from deficit hawks in Congress.

He said Wednesday, without details, that his initial budget proposal next month will include "some very specific outlines" of how he plans to tackle spending. That extends to the ballooning and so-far unsolvable fiscal problem presented by the Social Security and Medicare programs, which Obama promised would be "a central part" of his deficit-reduction plan.

The stimulus package is expected to easily pass Congress, now controlled by solid Democratic majorities in both houses. But since it is the first major legislative test of an administration that promised to usher in a new era of bipartisan cooperation, and a measure of such enormous scope and import, Obama doesn't want to see it approved on a merely party-line vote.

On Wednesday, he made good on a campaign promise and introduced his choice for a new White House post he is creating: chief performance officer. Nancy Killefer, a professional efficiency expert, is charged with scouring the federal budget to eliminate programs that don't work and improve those that do. Obama called her appointment "among the most important that I will make."

"We committed to changing the way our government in Washington does business so that we're no longer squandering billions of tax dollars on programs that have outlived their usefulness or exist solely because of the power of a lobbyist or an interest group," Obama said.

Killefer, the director of a management consulting firm and a former assistant treasury secretary will be Obama's hatchet woman, with power to recommend directly to him the slashing of programs and projects government-wide. She'll help agencies set performance standards and hold managers accountable.

But she also will run up against a long history of other chief executives' similar promises under different titles that have fallen short.

She said the bureaucracy's entrenched problems have taken decades to develop and will take time to fix. But she said it would be different this time. "I have seen it done," Killefer said at Obama's side.

Obama has to give Congress in early February a budget request — at least the bare bones of one — covering spending for the next fiscal year. Because that's so soon after he takes over the executive branch of government, his submission won't be anything like the usual one that fills several volumes and hundreds of pages.

Pelosi, speaking before the House Democratic Steering and Policy Committee, offered her own assurance that the stimulus plan would be responsible and that Democrats are committed to long-term fiscal discipline.

Economist Martin Feldstein joined others talking to the congressional panel to endorse the need for a big short-term spending package. But he also warned against anything that could create a spending habit and swell the deficit even further. "There should be an exit strategy," he said.