White House unclear on whether to reuse TARP funds on jobs

President Barack Obama on Monday appeared uncertain about what he can do with unspent federal bailout money even as congressional Democrats are pressuring him to use the funds for a job creation bill.

Obama is scheduled to give a speech on job creation on Tuesday, and Democrats are hoping that in those remarks the president will come out in favor of funding a new jobs bill with unspent and returned money from the Troubled Assets Relief Program (TARP).

But Obama and his aides said they are still investigating whether Obama can use that money, as Republicans are howling that the president does not have the legal authority to spend TARP funds on stimulus-like projects.

Obama told reporters in the Oval Office Monday that TARP, passed during the end of former President George W. Bush's administration, "turned out to be much cheaper than we had expected, although not cheap."

Obama agreed with Republicans that some of the money could be used to pay for debt reduction, but acknowledged that it is unclear what the parameters are for spending the rest of the money.

"The question is, Are there selective approaches that are consistent with the original goals of TARP — for example, making sure that small businesses are still getting lending — that would be appropriate in accelerating job growth?" Obama said.

White House press secretary Robert Gibbs also sounded a cautious note, adding "the White House is looking at whether or not [the TARP funds]… would be available."

But the president doesn’t see the measure as a “silver bullet,” according to the White House spokesman, who said the American people will likely embrace that idea.

"What message does that send to Main Street? Help is on the way," Gibbs said. "It sends the message that your economic vitality is just as important as anybody that lives or works or breathes on Wall Street."

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