President Barack Obama is laboring to persuade the American people of the need for a virtually unprecedented $827 billion measure to resuscitate an economy he accuses the Bush administration of smothering.
In office just less than three weeks, Obama is hitting the road again — this time taking his plea for congressional action to an audience in Fort Myers, Fla., a metropolitan area that has been among the hardest-hit by mortgage foreclosures. The format of his appearance is a town-hall meeting along the same lines as the one he presided over Monday in Elkhart, Ind.
There, he warned that the economic slump was so dangerously sapping national vibrancy that it might become irreversible without strong government intervention. At a White House news conference Monday night, he went even further.
“This is not your ordinary, run-of-the-mill recession,” Obama said, citing Japan’s failure to take bold actions in time to reverse a recession that turned the 1990s into a “lost decade” with no economic growth.
He said that failure to act quickly “could turn a crisis into a catastrophe.”
“And if there’s anyone out there who still doesn’t believe this constitutes a full-blown crisis,” Obama added, “I suggest speaking to one of the millions of Americans whose lives have been turned upside-down because they don’t know where their next paycheck is coming from.”
He placed the blame for this squarely on former President George W. Bush.
“But as we’ve learned very clearly and conclusively over the last eight years,” Obama said, “tax cuts alone can’t solve all of our economic problems, especially tax cuts that are targeted to the wealthiest few Americans. We have tried that strategy time and time again, and it’s only helped lead us to the crisis we face right now.”
On another front, the new administration is trying to cope with burgeoning political outrage over the handling of the government’s $700 billion financial rescue program. It plans later Tuesday to announce tough new standards on future payments to banks. It also is greatly expanding an effort to unclog credit markets to provide loans to consumers and businesses.
Funding to unfreeze borrowing in such areas as credit card debt, auto loans and student loans, will see a huge increase — from $20 billion to $100 billion, according to administration officials who spoke on condition of anonymity because the program had not yet been publicly announced.
On Capitol Hill, Democratic Senate leaders were able Monday to rally the votes needed to clear a procedural barrier to open the way toward expected final passage Tuesday. The 61-36 vote, just one more than the 60 required, was heavily partisan, with only three Republicans — Sens. Susan Collins and Olympia Snowe of Maine and Arlen Specter of Pennsylvania — joining all Democrats in voting for the package, a blend of federal spending and tax cuts.
Senate Majority Leader Harry Reid of Nevada called it “the first step on the long road to recovery.” In the House, not a single Republican had voted for that chamber’s version of the legislation.
Still ahead was a difficult round of further negotiations aimed at producing a final House-Senate compromise. Congressional leaders hope to get the bill to Obama’s desk before the Presidents Day recess next week.
“I’m reticient to get into the negotiating,” White House press secretary Robert Gibbs told NBC’s “Today” show Tuesday. “I will tell you this, the president is willing to do whatever it take with Democrats or Republicans to get something on his desk.” He said the American people need the help “right now.”
The House and Senate versions are relatively close in size and are similar in many respects, but there are some key differences.
Both include Obama’s call for a tax cut for lower-income wage earners, and billions of dollars for unemployment benefits, food stamps, health care and other programs to help victims of the worst recession in decades. In a bow to the administration, the bills also include billions for development of new information technology for the health industry, and billions more to lay the groundwork for a new, environmentally friendly energy industry that would help reduce the nation’s dependence on foreign oil.
At the same time, the Senate measure calls for more tax cuts and less spending than the House bill. It includes a $70 billion provision to protect middle-class taxpayers from falling victim to the alternative minimum tax, which was intended to make sure the very wealthy don’t avoid paying taxes.
Both bills provide for tax breaks for home buyers, but the Senate’s provision is far more generous. The Senate bill also gives a tax break to purchasers of new cars.