President Barack Obama is budgeting for a new $750 billion bank bailout this year, raising the prospect of a dramatic increase in the stake taxpayers already hold in the beleaguered financial sector.

The White House's 2010 budget released Thursday includes a $250 billion contingency fund for 2009, the projected cost to the government of purchasing $750 billion in assets from banks in need of capital infusions.

In essence, taxpayers would foot the entire $750 billion up front. Administration budget writers predict the value of the assets that the government purchases would result in a loss of 33 cents for every $1 spent, hence the $250 billion net expenditure.

"We hope that it will not be necessary," White House budget director Peter Orszag said Thursday.

Still, the inclusion of the money is the clearest sign yet that Obama's economic team is not certain that the $700 billion Troubled Asset Relief Program that Congress approved last fall has done enough to unlock the capital markets and make credit more available.

If Obama asks Congress for the money, he would be placing much of his political capital on the line given the bipartisan antipathy toward the industry. House Speaker Nancy Pelosi reacted coolly to the possibility of a request, saying any new spending would have to meet standards of "accountability, transparency and insistence that the money be used to pump credit to the economy."

The financial sector welcomed Obama's contingency fund as a sign that the administration is prepared to back the industry. That alone, industry officials said, could build new investor confidence in the markets.

"The market has to perceive it to be well above what might be necessary," said economist Brian Bethune of IHS Global Insight.

"Certainly if he says they're prepared to put up $750 billion, that sounds like a lot of resources."

The Obama administration still has more than $250 billion available from the original TARP funds to inject capital into banks. Whether it needs more could depend on whether economic conditions.

It is conceivable that some of the extra money - if requested - would be used to inject more capital into banks and for a soon-to-be operational public-private program to buy rotten assets held by banks, one official said. White House spokesman Robert Gibbs also conceded that the money could be used to assist General Motors Corp. and Chrysler LLC.