WASHINGTON (Reuters) - President Barack Obama pounded Republicans Saturday for policies that fueled the economic crisis, while welcoming a Senate deal on his stimulus bill that ideologically split lawmakers hope to finish by mid-month.
Obama said quick action on the package was imperative to avoid catastrophe and praised the group of moderate senators from both political parties for coming up with a compromise.
Senate Democrats agreed late Friday to trim spending proposals and support tax cuts in a roughly $800 billion bill. 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 there would be a finished product by February 16. A Senate vote is scheduled for Tuesday, one day after Obama gives his first full news conference as president.
“Democrats and Republicans came together in the Senate and responded appropriately to the urgency this moment demands,” Obama 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.”
Senators continued to spar over the price tag as they debated the package in a rare Saturday session.
Republican Senator Jeff Sessions said it would cost some $40 billion a year just to service the additional debt that resulted from the spending portions of the bill.
“How big is $40 billion? That’s the annual road budget, the annual highway budget for the United States of America. That’s a lot of money,” Sessions said.
Senator Barbara Boxer, a Democrat, retorted that Republicans did not complain about debt from the Iraq war started by Obama’s Republican predecessor, George W. Bush.
Pennsylvania Senator Arlen Specter predicted the bill would pass the Senate vote with his support and that of at least two other Republicans — Susan Collins and Olympia Snowe of Maine.
“If the federal government does not act, there will be very, very severe effects not only on Wall Street but on Main Street,” he told a news conference in Philadelphia. “I believe that it (the bill) provides the essentials to do the job.”
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,” Steele said in the Republican radio address, adding that families would be helped the most by keeping more money in their pockets.
Obama showed little patience for Republican arguments and continued his aggressive posture of recent days, which he has used to wield the political capital from his November 4 electoral victory over Republican John McCain.
“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 in his radio address.
Aside from the stimulus bill, Treasury Secretary Timothy Geithner is expected to unveil steps Monday to help U.S. banks battered by the financial crisis with 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.
Geithner told lawmakers Saturday financial institutions that get government help will have to make loan modifications and meet other new standards, Democratic sources said.
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 is in its worst economic crisis in more than 70 years came in Friday’s report that nearly 600,000 jobs were lost in January.
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 was confident of passage of the stimulus measures by mid-February.
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, Jon Hurdle and Susan Cornwell; Editing by John O'Callaghan