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WASHINGTON: Barack Obama's top transition aide discounted talk of tensions over the financial crisis with the White House, after the president-elect pressed for urgent aid to ailing auto giants.
Leaked details of Obama's one-on-one chat with President George W. Bush on Monday raised the stakes as outgoing White House teams and Democrats in Congress jostled over the scope of short-term economic rescue efforts.
The New York Times cited unnamed sources as saying the president may agree to new funding for troubled US automakers and a new economic stimulus package if Democrats pass a Colombia free trade pact which is stalled in Congress.
Obama aides confirmed the president-elect had urged the president to support immediate aid for the auto industry, but denied Bush offered the Colombia pact as part of a deal.
"The topic of Colombia came up. There was no quid pro quo in the conversation," Obama's transition co-chair John Podesta said in his first post-election news conference.
"The president did not try to link Colombia to the question of an economic package going forward," Podesta said.
"Whatever happened this morning as a result of reports which I think were not accurate, I think we have cleared up."
Podesta said he had spoken with White House chief of staff Joshua Bolten about the issues and again praised the administration for being very "cooperative" in organising the transition of power.
For his part, Bush declined to give details of his talks with Obama.
"To the extent that he asked my advice and he may want to ask it again, and the best way to make sure he feels comfortable asking it again is for me not to tell you in the first place what I advised him," Bush said on CNN.
The drama over proposed aid to automakers reflected the political calculations being made in Washington ahead of Obama's inauguration as the 44th US president on January 20.
Democratic leaders of Congress called on Saturday for some funds contained in a US$700-billion federal rescue plan for the financial sector to be diverted to the struggling auto industry.
The Obama team has warmly praised Bush's outgoing administration for working to ensure a "smooth" transition of power, but the debate over an auto industry rescue was the first overt sign of underlying tensions.
US labour leaders, Obama and Democrats opposed the Colombia trade deal, which Bush has been trying to pass for months, over anti-union violence by right-wing paramilitary squads allegedly linked to the Colombian armed forces.
Reversing course on the pact could carry a heavy political price for Obama, who spoke out firmly against the Colombia pact, and for congressional Democrats who won office partly on an anti-free trade platform.
The Democratic leadership of the House of Representatives poured cold water on any talk of a possible quid pro quo.
House Speaker Nancy Pelosi "has said that it's urgent that we have an economic recovery package and it's not dependent on a trade deal," said her spokesman Brendan Daly.
"The Colombia free trade agreement should be considered on its own merits," he said.
Pelosi and Senate Majority Leader Harry Reid on Saturday made public an appeal to Treasury Secretary Henry Paulson to help the sector as part of a US$700-billion finance industry bailout plan.
On Tuesday, Pelosi said she had asked one of her top lieutenants to craft legislation to carry out the plan
Paulson has broad powers under the bailout to purchase financial instruments to restore financial market stability, US$250 billion of which has been pledged to buy stakes in US banks.
The White House has been vague over the last few days as to what it may consider in terms of aid for the automakers.
But spokesman Tony Fratto said Tuesday that US lawmakers had already created a loan programme "specifically designed to assist automakers."
"If Congress intends to consider legislation to accelerate funds they've already appropriated, we'll listen to their ideas - as long as funding will continue to go to viable firms and with strong taxpayer protections," he said.
The biggest US automaker General Motors warned Friday that it would run out of cash in the first half of next year and fellow Detroit giants Ford and Chrysler are also in crisis.
- AFP/yb
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