Page last updated at 22:54 GMT, Monday, 7 December 2009

US bank bail-out money could boost jobs, says Obama

US President Barack Obama
President Obama is due to outline job creation methods on Tuesday

President Obama has said that money not spent under the $700bn (£425bn) US bank bail-out package could be used to cut the US deficit and boost jobs.

The Troubled Asset Relief Program (Tarp) was "much cheaper than expected", he told reporters.

Reports say the cost of the Tarp will be $200bn below the Treasury estimate.

Mr Obama was speaking after a meeting with the Turkish prime minister. He is is due to deliver a major speech on the economy on Tuesday.

'Accelerating job growth'

In August, the Obama administration had estimated that the cost of the rescue package would be $341bn.

But on Sunday, a Treasury Department official said the long-term cost would be at least $200bn less than that.

President Obama admitted that previous estimates were too high.

"Tarp has turned out to be much cheaper than we had expected, although not cheap," he told reporters at the White House after his meeting with Prime Minister Recep Tayyip Erdogan.

And he hinted that the money could be used to reduce the massive $1.4 trillion US deficit and to help create jobs.

"It means that some of that money can be devoted to deficit reduction and the question is, are there selective approaches that are consistent with the original goals of Tarp - for example, making sure that small business are still getting lending that would be appropriate in accelerating job growth?" he said.

"I will be addressing that tomorrow."

The unemployment rate in the US currently stands at 10%.

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