Obama raises pressure over stimulus bill

Barack Obama’s administration has stepped up pressure on US lawmakers, threatening to force them to work through their one-week recess starting on Friday
to get the $800bn (£541bn) economic stimulus package enacted as soon as possible.

Amid the worst job losses in a generation, Mr Obama postponed details of a $350bn bank rescue plan to force legislators to focus first on passing the economic stimulus bill.

Barack Obama’s administration yesterday said if necessary it would keep lawmakers working through their one week recess that starts on Friday in order to get the $800bn economic stimulus package enacted as soon as possible.

Tim Geithner, Treasury secretary, will now unveil the new troubled asset relief programme guidelines on Tuesday.

“With record high job losses and weakening economic forecasts, we’re focused on working with Congress to pass an economic recovery bill,” said a Treasury spokesman.

“Economic officials administration-wide will be working with senators throughout the day.”

As part of the administration’s plans to put pressure on Congress, Mr Obama will on Monday hold a session with voters in Indiana before staging his first presidential press conference during evening prime time television.

Lawrence Summers, senior economic adviser to Mr Obama, on Sunday said politics should not prevent Congress from enacting the stimulus. His comments followed a late-night compromise with three Republican senators on Friday that cut more than $100bn in spending from the bill that was passed by the House of Representatives.

“If there was ever a moment to transcend politics, this is that moment and that’s what I very much hope will take place as this legislation moves forward,” Mr Summers told Fox News. “Ninety per cent of these bills are overlapping.”

The administration’s next task will be to close off further Senate debate on the stimulus – a procedure that Harry Reid, the Senate majority leader, thinks will work after Friday’s compromise.

After that, there will be several more congressional hurdles to clear before the bill reaches Mr Obama’s desk. “We will work through next weekend and beyond if necessary,” said Jim Manley, Mr Reid’s spokesman.

On the Geithner plan, analysts say Tuesday’s announcement represents a pivotal moment for the administration.

If the Obama team’s plan for repairing the financial sector and restoring the flow of credit to households and businesses succeeds, it could lay the foundations for recovery from the credit crisis.

Barack Obama’s administration has stepped up pressure on US lawmakers, threatening to force them to work through their one-week recess starting on Friday, to get the $800bn economic stimulus package enacted as soon as possible.

Amid the worst job losses in a generation, Mr Obama postponed details of a $350bn bank rescue plan to force legislators to focus first on passing the economic stimulus bill.

“With record high job losses and weakening economic forecasts we’re focused on working with Congress to pass an economic recovery bill,” said a Treasury spokesman.

“Economic officials administration-wide will be working with senators throughout the day.”

US stocks meanwhile struggled on Monday to extend last week’s strong gains amid fresh uncertainty over the stimulus package and bank rescue plan.

As part of the administration’s plans to put pressure on Congress, Mr Obama will on Monday hold a session with voters in Indiana before staging his first presidential press conference during evening prime time TV.

Lawrence Summers, senior economic adviser to Mr Obama, on Sunday said politics should not prevent Congress from enacting the stimulus. His comments followed a late-night compromise with three Republican senators on Friday that cut more than $100bn in spending from the bill that was passed by the House of Representatives.

“If there was ever a moment to transcend politics, this is that moment and that’s what I very much hope will take place as this legislation moves forward,” Mr Summers told Fox News. “Ninety per cent of these bills are overlapping. Let’s work it out quickly, get moving and start preserving those jobs.”

The administration’s next task will be to pass a resolution in the Senate Monday night to close off further debate on the stimulus – a procedure that Harry Reid, the Senate majority leader, thinks will work after Friday’s compromise.

After that there will be several more congressional hurdles to clear before the bill reaches Mr Obama’s desk. “We will work through next weekend and beyond if necessary,” said Jim Manley, Mr Reid’s spokesman.

On the Geithner plan, analysts say Tuesday’s announcement represents a pivotal moment for the administration. If the Obama team’s plan for repairing the financial sector and restoring the flow of credit to households and businesses succeeds, it could lay the foundations for recovery from the credit crisis.

If it fails, a dysfunctional financial system could prevent any durable economic rebound from taking hold, steadily undermining all the wider hopes and promise of the Obama presidency.

Mr Summers said new guidelines would use a combination of guarantees and financing to bring in private capital into the financial system.

But he added that substantial government resources would be needed, and left open the possibility of going back to Congress for additional funds above the $350bn remaining from the Tarp.