President Barack Obama promised on Saturday to help lower Americans' mortgage costs with a new plan, coming soon, that would revive the financial system and "get credit flowing again."
Obama and his top advisers are weighing how to structure the remaining $350 billion that Congress approved last year to save financial institutions and lenders from collapse. The new president also warned there is no single action that would allow his administration to fix the struggling U.S. economy, a stark statement at the end of a week that saw tens of thousands of Americans lose their jobs.
Obama, who has made fighting the country's economic and financial crises the top priority of his young administration, called on the U.S. Senate to approve an economic stimulus bill that the House of Representatives passed this week.
The final three months of last year sent the economy into its worst downhill slide in a quarter-century. The economy stumbled backward at a 3.8 percent pace, government economists said Friday; that rate could accelerate to 5 percent or more this quarter.
But as economic conditions get worse the president said new strategies were coming to address the country's ills.
"Soon my Treasury secretary, Tim Geithner, will announce a new strategy for reviving our financial system that gets credit flowing to businesses and families," Obama, a Democrat, said in his weekly radio and Internet address.
"We'll help lower mortgage costs and extend loans to small businesses so they can create jobs."
Obama did not offer specifics about the new plan or say when it would be unveiled. His chief spokesman, Robert Gibbs, said on Friday that the White House would hold meetings next week about financial industry regulation.
Toxic assets
Geithner met with the administration's top officials and advisers in recent days, trying to finish a plan to overhaul the $700 billion bailout program that is already half gone. Geithner previously said the administration is weighing the possibility of using a government-run "bad bank" to buy up toxic assets that are weighing on the books of financial institutions, but some officials now say that option is gone because of potential costs.
Many of the measures under consideration could end up costing taxpayers hundreds of billions of dollars beyond the original $700 billion price tag. Aides would not rule out the possibility of the administration's asking for more than the $350 billion already allocated.
Republicans, who opposed the president's stimulus package of over $800 billion largely because of its spending priorities, suggested mortgage help as well, proposing government-backed 4 percent fixed-rate mortgages for "any credit-worthy borrower," Senate Republican Leader Mitch McConnell said.
"The availability of these low-interest loans would increase demand for houses significantly and low-interest mortgages would boost household income," McConnell said in a separate radio address.
Obama said his plan would ensure corporate chief executives do not siphon away tax dollars to fund big bonuses, expressing outrage again at reports of big pay-outs in 2008 despite massive job cuts, financial losses and government bailouts.
'Arrogance and greed'
"We learned this week that even as they petitioned for taxpayer assistance, Wall Street firms shamefully paid out nearly $20 billion in bonuses for 2008," the president said.
"While I'm committed to doing what it takes to maintain the flow of credit, the American people will not excuse or tolerate such arrogance and greed."
The president said he would insist on "unprecedented transparency, rigorous oversight, and clear accountability" for funds that went toward stabilizing the financial system.
He repeated his mantra that the country's economic picture would likely get worse before it got better and seemed to hedge a bit on how many jobs his proposals would create and by when.
In Saturday's address, he said his stimulus package would save or create at least 3 million jobs "over the next few years." During his address on January 10, before he had taken over the presidency from Republican George W. Bush, Obama said an analysis by his advisers showed up to 4 million jobs could be saved or created by 2010 through the package.
Obama said he would work with both political parties to ensure a strong stimulus bill eventually made it to his desk.
"Americans know that our economic recovery will take years — not months," he said. "But they will have little patience if we allow politics to get in the way of action, and our economy continues to slide."