Pelosi: Bailout money to fund jobs initiative

WASHINGTON — The top Democrat on Capitol Hill said Thursday that Congress will tap unused funds from the Wall St. bailout to pay for new spending on infrastructure projects and other steps aimed at boosting jobs.

House Speaker Nancy Pelosi, D-Calif., said money from the bailout should be used to pay for jobs legislation that would funnel billions of dollars to road, bridge and other infrastructure projects and also help struggling state and local governments retain public employees such as firefighters, police officers and teachers. She also promised help for small businesses reeling from a credit crunch.

Pelosi's remarks to reporters came as the White House called a jobs forum of business and labor leaders to explore ideas on how to boost slumping employment figures.

Pelosi didn't give a price tag on the initiative and said it would come on top of a costly "safety net" initiative that would again extend unemployment payments for those whose benefits have run out and renew a program that offers the jobless a 65 percent subsidy for health insurance premiums under the COBRA program.

About $210 billion of Troubled Assets Relief Program money remains uncommitted or has been paid back; Bank of America Corp. also announced Wednesday that it would repay its $45 billion in government bailout money.

The administration has been wary of using TARP funds for other purposes, but Pelosi's comments come after administration officials have privately softened that stance in discussions with congressional Democrats.

"The investment that we have in jobs ought to be paid for in TARP funds," Pelosi said.

Using bailout authority for a jobs initiative would add billions of additional dollars to the $12.1 trillion national debt. Under the law, repaid TARP funds must be used to reduce the debt and unused bailout money is never borrowed.

Treasury Secretary Timothy Geithner has until the end of the month to decide whether to renew the program. While he's given no indication he won't renew TARP, he says he wants to wind it down.

Pelosi said she hopes the jobs package could pass by the end of the year, though she acknowledged the short congressional schedule may mean it'll have to wait until early next year. Congressional Democrats are, however, hopeful of extending unemployment benefits and COBRA subsidies in an upcoming omnibus spending bill.