The US Senate has decided to approve $350 billion more of bailout money for the automobile industry. The budget, which is the second round of federal funds, is set to be released this year.

Sources say that the federal funds will be used to provide loan grants to automotive suppliers, auto finance companies and automakers.

The first $350 billion funds were released to fund emergency loans to automotive companies such as Chrysler LLC an General Motors.

The second round of $350 billion was released after aids to new President Barack Obama ensured that the funds will strictly be controlled, insiders say.

Obama designee National Economic Council Chairman, Larry Summers, said in a letter that the second $350 billion funds will not be allocated to industrial policies. He also said that the automobile companies will only receive the additional aid provided that they have a concrete reconstruction for long-term viability.

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During a recent speech engagement in front of the joint session of the U.S. Congress, President Barack Obama holds accountable the car manufacturers for their bad practices that pushed them to the brink while fighting the current recession.

The US President promised though to help them regain their grounds to be able to compete again and win the auto industry. Obama also pinpointed the millions of jobs depending on car manufacturing.

The Obama led government is taking actions to help revive the ailing car industry. The US President backed up the plans of former president George W. Bush in pushing for the emergency loans amounting to $17.4 billion to GM and Chrysler LLC.

The federal government has activated several taskforce to study the restructuring plans of the car manufacturers which are asking for an additional loan of $21.6 billion. They are also looking into the call for help coming from suppliers amounting to $18.5 billion.

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