04/24/2009 05:12 am ET Updated May 25, 2011

Reid Splits With Obama: No Bailout Funds In Budget

Senate Majority Leader Harry Reid (D-Nev.) said Tuesday that he doesn't object to the removal of $250 billion in bailout funds that Obama had requested in the budget in case of a financial emergency.

Obama prides the budget he presented to Congress as an honest accounting. Past budgets have not included costs of the wars in Iraq and Afghanistan and didn't budget for natural disasters. Obama, critical of such fingers-crossed, bury-the-cost accounting, hoped to change that this fiscal year, accounting for the wars, emergencies and the possibility of a further collapse of the financial system.

But honest accounting makes for a high deficit. Budget Committee Chairman Kent Conrad (D-N.D.) said earlier he planned to reduce that deficit by removing the $250 billion bailout contingency fund.

"I talked to him last week about whether that second phase of TARP" - the bank bailout - "should be in it. I said, 'I don't really feel strongly that it should be.' And it's not in yet and I have no problem with that," Reid told reporters.

Asked earlier by the Huffington Post if he agreed with Conrad's decision, Finance Committee Chairman Max Baucus (D-Mont.) said that he would leave it to Conrad.

Reid said that if more bailout funds are needed, Congress can deal with them separately. "If something comes up, we can always bring it up. If it's an emergency we can do it straight legislation. So I'm not concerned," he said.