U.S. stimulus debate has Democrats scrambling

By Steve Holland

WASHINGTON (Reuters) - President Barack Obama and his Democrats are scrambling to fend off Republican criticism that a $787 billion economic stimulus is not working, and talk is turning to a politically risky second spending plan.

Almost five months after Democrats used their majorities in the U.S. Congress to push through the stimulus, the two-year package has had little impact as anxious Americans watch the country's unemployment rate surge to 9.5 percent.

Obama is asking for patience and not ruled out a second spending plan to try to boost the economy out of recession.

"He's not ruling anything out, but at the same time he's not ruling anything in," White House spokesman Robert Gibbs said. "Obviously we passed a hefty recovery plan that implements over the course of about a two-year period of time, and we're on track with that implementation."

While the stimulus is debated, there are signs Obama's overall domestic agenda is posing something of a challenge for Congress. Lawmakers are struggling to reach agreement on healthcare reform, and on Thursday they put off climate-change legislation at least until September.

Amid all of this, Americans are expressing concern about Obama's stewardship of the economy in the more than five months since he took office.

The White House argues the jobless picture would be worse without his economic stimulus plan. The argument is difficult to make, said Kathleen Hall Jamieson, director of the Annenberg Public Policy Center at the University of Pennsylvania.

"The problem is arguing that something would've been worse had we not done what we did," she said. "And the second problem they have is the projections they gave originally turned out to be faulty."