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Obama has been given some extra wiggle room because of the stabilizing financial system: The Treasury Department is cutting its long-term cost projections for the government's bail-out program by $200 billion, The Wall Street Journal reported Monday.

The $700 billion financial rescue package, which was approved by Congress in October 2008 to help keep Wall Street afloat, is now expected to cost just $141 billion over the next 10 years as many banks have already paid back their emergency loans.

More than $70 billion in loans have been returned and Bank of America announced last week that it, too, planned to pay back the $45 billion it was given at the height of the financial crisis.

The lower cost comes as welcome news for an administration that has been heavily criticized for running a sky-high budget deficit in order to wrest the U.S. economy out of recession.

The financial rescue "has turned out to be much cheaper than we had expected, although not cheap," Obama said during a White House meeting with Turkish Prime Minister Recep Tayyip Erdogan. "It means some of that money can be devoted to deficit reduction."

But Obama suggested that some of the funds could be used for "selective approaches" that could boost job growth and encourage lending to small businesses. The details will be unveiled Tuesday.

Congress is also debating whether to use the new-found funds to stimulate job growth, including a so-called "cash-for-caulkers" program that would offer Americans tax incentives to weatherize their homes.

Federal Reserve Chairman Ben Bernanke suggested Monday that economic recovery in the United States was not a foregone conclusion without some additional government help, and warned that unemployment would remain high for some time to come.

"Though we have begun to see some improvement in economic activity, we have some way to go before we can be assured that the recovery will be self-sustaining," Bernanke said in a speech before the Economic Club of Washington.