Obama pushes Senate Democrats on stimulus and bailout

By Richard Cowan

WASHINGTON (Reuters) - President-elect Barack Obama huddled with his fellow Democrats in the U.S. Senate on Tuesday, trying to build support for upcoming votes on economic stimulus legislation and releasing $350 billion (£241 billion) in unspent Wall Street bailout funds.

Obama's visit came exactly one week before he returns to Capitol Hill, where he will be sworn in as the 44th president on Jan 20. His success or failure on these two massive initiatives will set the tone for his presidency as he moves into the White House.

More than $1 trillion in government money is in play with the two measures -- one that would provide around $775 billion to jolt the U.S. economy out of its recession and another allowing the Treasury Department to spend the second half of the $700 billion in Wall Street bailout funds Congress provided in October.

Following an hour-long meeting with Obama, Senate Majority Leader Harry Reid, a Nevada Democrat, predicted he would be able to round up enough votes to free up the bailout funds despite bipartisan concerns about how the money is spent.

"I think we will get the necessary votes," Reid told reporters. That seemed likely as Senate Minority Leader Mitch McConnell of Kentucky said despite reservations among his fellow Republicans, some would vote to release the money.

But earlier in the day, senior Democratic and Republican senators were predicting a tough fight leading up to the vote that could come by week's end. Many senators are demanding more information on how the first $350 billion was spent. They also want more conditions on the next batch, along with more transparency on the spending.

BETTER ACCOUNTING

Sen. Carl Levin, a Michigan Democrat, left the meeting with Obama saying the president-elect promised a better accounting of how the money will be spent and limits to keep it from being used to pad executive salaries or pay out stock dividends.