President Barack Obama dispatched his top economic adviser and vice president Sunday to relentlessly press their sales pitch for an $825 billion stimulus package to halt the U.S. economic slide, as the plan came under more fire from Republican leaders.
Sen. John McCain, Obama's opponent in the November presidential contest, said he did not believe the stimulus package did enough to create jobs.
"There have to be major rewrites if we want to stimulate the economy... . As it stands now I can't vote for it," McCain said on Fox television.
He also continued a theme from his campaign, declaring that the former Bush administration tax cuts, that were particularly beneficial to high-earning Americans, should be made permanent. The measure expires next year and Obama has said he will not seek their renewal.
President seeking a balance
Obama's top economic adviser, Larry Summers, said the president was seeking a balance between new spending and tax cuts in the recovery package, which has been criticized by Republicans as overloaded with government intervention in the economy. Summers said Obama was trying to strike a position between Republican objections and the inclination of some fellow Democrats who want the package tilted even more toward federal spending.
Democratic leaders hope to approve the package by mid-February, but House Republican leader John Boehner said there won't be much — if any — support from Republicans, without significant changes. Both men spoke on NBC television.
Vice President Joe Biden joined Summers in emphasizing the message outlined by Obama in his first Saturday radio and Internet address from the White House. The new president extolled the benefits of the huge spending program, telling Americans it would produce better schools, lower electricity bills and provide health care insurance coverage for the millions now unemployed or likely to lose their jobs in the worst economic collapse since the 1930s.
Obama was trying to build public support and put pressure on some recalcitrant lawmakers for the $825 billion plan even as White House aides refused to rule out a second economic rescue package.
Ownership stake in banks
House Speaker Nancy Pelosi on Sunday said she could envision more money for the financial sector so long as the government, on behalf of taxpayers, takes an ownership stake in banks that receive the money. She mentioned no dollar figure.
She refused to use the term "nationalization" when referring to additional rescue dollars.
Already $350 billion has gone out to banks and financial institutions — and the second $350 billion installment is now in the hands of the new Obama administration, which is promising tougher standards on how the money is used.
But the president remained focused on his stimulus package, which Pelosi said she hoped to get to the floor of the House of Representatives this week.
"Our economy could fall $1 trillion short of its full capacity, which translates into more than $12,000 in lost income for a family of four. And we could lose a generation of potential, as more young Americans are forced to forgo college dreams or the chance to train for the jobs of the future," Obama said Saturday in a five-minute address.
"In short, if we do not act boldly and swiftly, a bad situation could become dramatically worse."
As Obama tried to sell Americans on the massive plan, some in the administration said there was consideration being given to a second economic recovery plan to salvage the economy. The idea was to assuage members of their own Democratic Party who fret that too little of the money is going toward public works projects that would employ their constituents.
Along with the speech, Obama's economic team released a report designed to outline tangible benefits of the plan and shore up support. Aides said they wanted people to understand exactly what they could expect if Congress supported the proposed legislation.
Unemployment could top 10 percent
The United States lost 2.6 million jobs last year, the most in any single year since World War II. Manufacturing is at a 28-year low and even Obama's economists say unemployment could top 10 percent before the recession ends. One in 10 homeowners is at risk of foreclosure and the dollar continues its slide in value. On Friday, 1st Centennial Bank of Redlands, California, became the third U.S. bank to fail this year.
The president and his top economic advisers met at the White House on Saturday to discuss economic issues. In addition to the stimulus package, the assembled experts used the two-hour session to discuss the upcoming federal budget, Obama's first chance to shape the country's spending.
A day earlier, Obama invited Democratic and Republican leaders to the White House to hear their ideas on the economy.
"We presented President Obama with our ideas to jump start the economy through fast-acting tax relief — not slow-moving government spending programs," House Republican leader John Boehner of Ohio said in the weekly Republican address. "We let families, entrepreneurs, small businesses, and the self-employed keep more of what they earn to encourage investment and create millions of new private-sector jobs."
Boehner, who was also appearing on the talk shows, said the Republicans would cut taxes for every taxpayer, dropping even the lowest income tax rates. "That's up to an extra $3,200 per family every year — money that can be saved, spent or invested in any way you see fit," Boehner said. He also proposed a tax credit for home purchases, an end of taxation of unemployment benefits and tax incentives for small businesses to invest in new equipment and hire new employees.
"We cannot borrow and spend our way back to prosperity," Boehner said.
Obama enjoys wide support
Obama plans to travel to Capitol Hill on Tuesday to meet with Republican leaders, his latest move to pass an economic package that has some Republican support.
Obama currently enjoys wide public support. The Gallup Organization on Saturday said 68 percent of Americans approve of Obama's performance in his first days in office. That's a number near the high end for new presidents, but short of President John F. Kennedy's 72 percent in 1961.
Gallup's poll found that 12 percent in the survey disapprove of Obama's job performance. That number is typical of all presidents.
The telephone interviews of 1,591 adults were conducted Wednesday to Friday. The margin of sampling error is plus or minus 3 percentage points.