The detailed version of President Barack Obama's budget unveiled on Thursday maintains a $250 billion placeholder for additional financial rescue efforts should that money be needed, an administration official told Reuters.
The TARP placeholder is still in the budget, said Ken Baer, press secretary for the White House Office of Management and Budget. Nothing has changed with regards to the Financial Stabilization Plan.
It is there just in case that money may be needed, Baer said, but he emphasized that no decision has been made about whether or when to formally request the money from Congress.
The placeholder was spelled out in the bare-bones version of the budget that Obama released in February.
The administration said at the time that the placeholder was included in the interests of transparent budgeting but no determination had been made about whether the money would be needed.
If the administration were to request the money, it could finance $750 billion in fresh government aid to the battered U.S. banks, on top of the $700 billion approved by Congress last year.
The bank bailout program is unpopular in the U.S. Congress. The Democratic-led Congress has approved the general outlines of Obama's $3.5 trillion budget blueprint but did not include the bailout funds in the nonbinding measure it approved.
Financial authorities plan to release the results of government stress tests on major banks at 5 p.m. EDT on Thursday.
The results will look at the ability of the 19 largest U.S. banks to weather a deep recession. They are expected to show about half the banks need more capital.
Treasury officials have said they have no intentions of returning to Congress in the near term to seek more federal bailout funds because they believe they can fund rescue efforts with existing resources and money returned to the government by healthy banks.
Treasury Secretary Timothy Geithner said in an opinion piece in the New York Times on Thursday that he expects banks will be able to repay more than the $25 billion of government rescue funds that he had previously estimated.
(Reporting by Caren Bohan; Editing by Will Dunham)