By Jeff Mason
WASHINGTON, Feb 7 (Reuters) - With a successful U.S. Senate vote on his economic stimulus bill in sight, President Barack Obama warned on Saturday that quick action was needed to avoid catastrophe and blamed Republican policies for pushing the country into crisis.
Senate Democrats agreed late on Friday to trim spending proposals and support tax cuts in a roughly $800 billion bill that was to go to a vote on Tuesday.
They rolled back an earlier $937 billion proposal by culling what critics, mostly Republicans, called billions of dollars in unwarranted spending.
Nancy Pelosi, speaker of the House of Representatives, predicted Obama would have a finished product to sign by mid-February.
Obama praised the group of moderate senators from both political parties for coming up with the deal.
'Democrats and Republicans came together in the Senate and responded appropriately to the urgency this moment demands,' he said in his weekly radio address.
'In the midst of our greatest economic crisis since the Great Depression, the American people were hoping that Congress would begin to confront the great challenges we face. That was, after all, what last November's election was all about.'
The president's emphasis on the 2008 election, which he won over Republican rival John McCain, continued a more aggressive posture in which Obama has sought to hit back at naysayers and wield the political capital that his robust victory gave him.
Obama poured scorn on Republican critics who said the stimulus bill lacked enough tax cutting measures and pointed his finger at the polices of his Republican predecessor George W. Bush for dragging the country into recession.
'We can't expect relief from the tired old theories that, in eight short years, doubled the national debt, threw our economy into a tailspin, and led us into this mess in the first place,' Obama said.
'We can't rely on a losing formula that offers only tax cuts as the answer to all our problems while ignoring our fundamental economic challenges.'
MORE HELP FOR BANKS
To further help U.S. banks battered by the financial crisis, Treasury Secretary Timothy Geithner is expected to unveil steps on Monday that will include government insurance of bad assets, a plan to shift toxic securities off bank balance sheets and money to modify homeowner mortgages.
Estimates of the banking system's potential capital needs top $1 trillion, far above the $350 billion the government has left in the Troubled Asset Relief Program set up in October.
But some experts cautioned that the new plan for banks will be difficult to get through Congress, tough to implement and may ultimately fail.
More evidence that the United States was in its worst economic crisis in more than 70 years came in Friday's report that nearly 600,000 jobs were lost in January.
Despite Friday's compromises on the stimulus plan, the bill is expected to garner support from only a handful of the Senate's minority Republicans.
The new chairman of the Republican National Committee, Michael Steele, promoted tax cuts and accused Democrats of seeking to spend too much with the stimulus package.
'Democrats have controlled both branches of government for less than a month, and you have to wonder if all that power has gone to their heads,' he said in the Republican radio address.
'American families are doing their best to balance their own budgets and pay their mortgages. The fastest way to help those families is by letting them keep more of the money they earn.'
Once the Senate passes the stimulus bill, differences with the version approved by the House will have to be ironed out.
Pelosi acknowledged potential resistance in the House to parts of the Senate bill, especially the scaling back of some expanded aid to states, but said she expected the final package to be on Obama's desk by his desired deadline of Feb. 16.
'I am certain that the president will be signing before Presidents' Day a bill that will create 3 million to 4 million new jobs, will cut taxes for the middle class and build infrastructure in America,' Pelosi told reporters at a Democratic meeting in Williamsburg, Virginia.
Obama said the legislation deserved scrutiny but that speed trumped perfection.
'The scale and scope of this plan is right, and the time for action is now,' Obama said in the radio address. 'If we don't move swiftly to put this plan in motion, our economic crisis could become a national catastrophe.'
(Additional reporting by Rick Cowan in Williamsburg; Editing by John O'Callaghan)
((jeff.mason@reuters.com; Reuters Messaging: jeff.mason.reuters.com@reuters.net))
((For full coverage of stimulus plans in the United States and elsewhere and for full coverage of Obama's first weeks in office)) Keywords: OBAMA/ (For more about the U.S. political scene please visit Reuters 'Front Row Washington' http://blogs.reuters.com//frontrow/) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
WASHINGTON, Feb 7 (Reuters) - With a successful U.S. Senate vote on his economic stimulus bill in sight, President Barack Obama warned on Saturday that quick action was needed to avoid catastrophe and blamed Republican policies for pushing the country into crisis.
Senate Democrats agreed late on Friday to trim spending proposals and support tax cuts in a roughly $800 billion bill that was to go to a vote on Tuesday.
They rolled back an earlier $937 billion proposal by culling what critics, mostly Republicans, called billions of dollars in unwarranted spending.
Nancy Pelosi, speaker of the House of Representatives, predicted Obama would have a finished product to sign by mid-February.
Obama praised the group of moderate senators from both political parties for coming up with the deal.
'Democrats and Republicans came together in the Senate and responded appropriately to the urgency this moment demands,' he said in his weekly radio address.
'In the midst of our greatest economic crisis since the Great Depression, the American people were hoping that Congress would begin to confront the great challenges we face. That was, after all, what last November's election was all about.'
The president's emphasis on the 2008 election, which he won over Republican rival John McCain, continued a more aggressive posture in which Obama has sought to hit back at naysayers and wield the political capital that his robust victory gave him.
Obama poured scorn on Republican critics who said the stimulus bill lacked enough tax cutting measures and pointed his finger at the polices of his Republican predecessor George W. Bush for dragging the country into recession.
'We can't expect relief from the tired old theories that, in eight short years, doubled the national debt, threw our economy into a tailspin, and led us into this mess in the first place,' Obama said.
'We can't rely on a losing formula that offers only tax cuts as the answer to all our problems while ignoring our fundamental economic challenges.'
MORE HELP FOR BANKS
To further help U.S. banks battered by the financial crisis, Treasury Secretary Timothy Geithner is expected to unveil steps on Monday that will include government insurance of bad assets, a plan to shift toxic securities off bank balance sheets and money to modify homeowner mortgages.
Estimates of the banking system's potential capital needs top $1 trillion, far above the $350 billion the government has left in the Troubled Asset Relief Program set up in October.
But some experts cautioned that the new plan for banks will be difficult to get through Congress, tough to implement and may ultimately fail.
More evidence that the United States was in its worst economic crisis in more than 70 years came in Friday's report that nearly 600,000 jobs were lost in January.
Despite Friday's compromises on the stimulus plan, the bill is expected to garner support from only a handful of the Senate's minority Republicans.
The new chairman of the Republican National Committee, Michael Steele, promoted tax cuts and accused Democrats of seeking to spend too much with the stimulus package.
'Democrats have controlled both branches of government for less than a month, and you have to wonder if all that power has gone to their heads,' he said in the Republican radio address.
'American families are doing their best to balance their own budgets and pay their mortgages. The fastest way to help those families is by letting them keep more of the money they earn.'
Once the Senate passes the stimulus bill, differences with the version approved by the House will have to be ironed out.
Pelosi acknowledged potential resistance in the House to parts of the Senate bill, especially the scaling back of some expanded aid to states, but said she expected the final package to be on Obama's desk by his desired deadline of Feb. 16.
'I am certain that the president will be signing before Presidents' Day a bill that will create 3 million to 4 million new jobs, will cut taxes for the middle class and build infrastructure in America,' Pelosi told reporters at a Democratic meeting in Williamsburg, Virginia.
Obama said the legislation deserved scrutiny but that speed trumped perfection.
'The scale and scope of this plan is right, and the time for action is now,' Obama said in the radio address. 'If we don't move swiftly to put this plan in motion, our economic crisis could become a national catastrophe.'
(Additional reporting by Rick Cowan in Williamsburg; Editing by John O'Callaghan)
((jeff.mason@reuters.com; Reuters Messaging: jeff.mason.reuters.com@reuters.net))
((For full coverage of stimulus plans in the United States and elsewhere and for full coverage of Obama's first weeks in office)) Keywords: OBAMA/ (For more about the U.S. political scene please visit Reuters 'Front Row Washington' http://blogs.reuters.com//frontrow/) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.